Correlation Between Westpac Banking and Pinnacle Investment
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Pinnacle Investment 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 Pinnacle Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Pinnacle Investment Management, you can compare the effects of market volatilities on Westpac Banking and Pinnacle Investment 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 Pinnacle Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Pinnacle Investment.
Diversification Opportunities for Westpac Banking and Pinnacle Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westpac and Pinnacle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Pinnacle Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Investment 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 Pinnacle Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Investment has no effect on the direction of Westpac Banking i.e., Westpac Banking and Pinnacle Investment go up and down completely randomly.
Pair Corralation between Westpac Banking and Pinnacle Investment
If you would invest 2,151 in Pinnacle Investment Management on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Pinnacle Investment Management or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westpac Banking vs. Pinnacle Investment Management
Performance |
| Timeline |
| Westpac Banking |
| Pinnacle Investment |
Westpac Banking and Pinnacle Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Pinnacle Investment
The main advantage of trading using opposite Westpac Banking and Pinnacle Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Pinnacle Investment 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 Pinnacle Investment will offset losses from the drop in Pinnacle Investment's long position.| Westpac Banking vs. Aeon Metals | Westpac Banking vs. Ironbark Capital | Westpac Banking vs. Red Hill Iron | Westpac Banking vs. Hawsons Iron |
| Pinnacle Investment vs. Aneka Tambang Tbk | Pinnacle Investment vs. Commonwealth Bank | Pinnacle Investment vs. BHP Group Limited | Pinnacle Investment vs. Rio Tinto |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |