Correlation Between Westpac Banking and Global Health
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Global 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 Global 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 Global Health, you can compare the effects of market volatilities on Westpac Banking and Global 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 Global Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Global Health.
Diversification Opportunities for Westpac Banking and Global Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westpac and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global 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 Global Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Health has no effect on the direction of Westpac Banking i.e., Westpac Banking and Global Health go up and down completely randomly.
Pair Corralation between Westpac Banking and Global Health
If you would invest 14.00 in Global Health on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Global 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. Global Health
Performance |
| Timeline |
| Westpac Banking |
| Global Health |
Westpac Banking and Global Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Global Health
The main advantage of trading using opposite Westpac Banking and Global Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Global 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 Global Health will offset losses from the drop in Global 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 |
| Global Health vs. Westpac Banking | Global Health vs. Champion Iron | Global Health vs. Ridley | Global 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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