Correlation Between Westpac Banking and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Advanced Braking at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Westpac Banking and Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Advanced Braking Technology, you can compare the effects of market volatilities on Westpac Banking and Advanced Braking and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Westpac Banking with a short position of Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Advanced Braking.
Diversification Opportunities for Westpac Banking and Advanced Braking
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westpac and Advanced is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec and Westpac Banking is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Westpac Banking are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Westpac Banking i.e., Westpac Banking and Advanced Braking go up and down completely randomly.
Pair Corralation between Westpac Banking and Advanced Braking
If you would invest 8.80 in Advanced Braking Technology on November 27, 2024 and sell it today you would earn a total of 0.10 from holding Advanced Braking Technology or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westpac Banking vs. Advanced Braking Technology
Performance |
| Timeline |
| Westpac Banking |
| Advanced Braking Tec |
Westpac Banking and Advanced Braking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Advanced Braking
The main advantage of trading using opposite Westpac Banking and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Advanced Braking can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Advanced Braking will offset losses from the drop in Advanced Braking's long position.| Westpac Banking vs. Home Consortium | Westpac Banking vs. Homeco Daily Needs | Westpac Banking vs. Resolute Mining | Westpac Banking vs. Chalice Mining Limited |
| Advanced Braking vs. Stelar Metals | Advanced Braking vs. Collins Foods | Advanced Braking vs. Dalaroo Metals | Advanced Braking vs. Perseus Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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