Correlation Between Westpac Banking and Capitol Health
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Capitol Health 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 Capitol Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Capitol Health, you can compare the effects of market volatilities on Westpac Banking and Capitol Health 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 Capitol Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Capitol Health.
Diversification Opportunities for Westpac Banking and Capitol Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westpac and Capitol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Capitol Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Health 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 Capitol Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Health has no effect on the direction of Westpac Banking i.e., Westpac Banking and Capitol Health go up and down completely randomly.
Pair Corralation between Westpac Banking and Capitol Health
If you would invest 37.00 in Capitol Health on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Capitol Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Westpac Banking vs. Capitol Health
Performance |
| Timeline |
| Westpac Banking |
| Capitol Health |
Westpac Banking and Capitol Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Capitol Health
The main advantage of trading using opposite Westpac Banking and Capitol Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Capitol Health 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 Capitol Health will offset losses from the drop in Capitol Health's long position.| Westpac Banking vs. Advanced Braking Technology | Westpac Banking vs. Talisman Mining | Westpac Banking vs. Regal Funds Management | Westpac Banking vs. Charter Hall Retail |
| Capitol Health vs. Westpac Banking | Capitol Health vs. Champion Iron | Capitol Health vs. Ridley | Capitol Health vs. Peel 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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