Correlation Between Westpac Banking and CAR GROUP
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and CAR GROUP 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 CAR GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and CAR GROUP LIMITED, you can compare the effects of market volatilities on Westpac Banking and CAR GROUP 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 CAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and CAR GROUP.
Diversification Opportunities for Westpac Banking and CAR GROUP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westpac and CAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and CAR GROUP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAR GROUP LIMITED 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 CAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAR GROUP LIMITED has no effect on the direction of Westpac Banking i.e., Westpac Banking and CAR GROUP go up and down completely randomly.
Pair Corralation between Westpac Banking and CAR GROUP
If you would invest 3,778 in CAR GROUP LIMITED on September 1, 2024 and sell it today you would earn a total of 372.00 from holding CAR GROUP LIMITED or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Westpac Banking vs. CAR GROUP LIMITED
Performance |
| Timeline |
| Westpac Banking |
| CAR GROUP LIMITED |
Westpac Banking and CAR GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and CAR GROUP
The main advantage of trading using opposite Westpac Banking and CAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, CAR GROUP 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 CAR GROUP will offset losses from the drop in CAR GROUP's long position.| Westpac Banking vs. Macquarie Group | Westpac Banking vs. Rio Tinto | Westpac Banking vs. CSL | Westpac Banking vs. Commonwealth Bank of |
| CAR GROUP vs. Westpac Banking | CAR GROUP vs. iShares Global Healthcare | CAR GROUP vs. Australian Dairy Farms | CAR GROUP vs. Adriatic Metals Plc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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