Correlation Between Westpac Banking and Aspire Mining
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Aspire Mining 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 Aspire Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Aspire Mining, you can compare the effects of market volatilities on Westpac Banking and Aspire Mining 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 Aspire Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Aspire Mining.
Diversification Opportunities for Westpac Banking and Aspire Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Westpac and Aspire is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Aspire Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspire Mining 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 Aspire Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspire Mining has no effect on the direction of Westpac Banking i.e., Westpac Banking and Aspire Mining go up and down completely randomly.
Pair Corralation between Westpac Banking and Aspire Mining
Assuming the 90 days trading horizon Westpac Banking is expected to under-perform the Aspire Mining. But the stock apears to be less risky and, when comparing its historical volatility, Westpac Banking is 11.46 times less risky than Aspire Mining. The stock trades about -0.11 of its potential returns per unit of risk. The Aspire Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Aspire Mining on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Aspire Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westpac Banking vs. Aspire Mining
Performance |
| Timeline |
| Westpac Banking |
| Aspire Mining |
Westpac Banking and Aspire Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Aspire Mining
The main advantage of trading using opposite Westpac Banking and Aspire Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Aspire Mining 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 Aspire Mining will offset losses from the drop in Aspire Mining's long position.| Westpac Banking vs. Westpac Banking | Westpac Banking vs. Clime Investment Management | Westpac Banking vs. Bisalloy Steel Group | Westpac Banking vs. Tabcorp Holdings |
| Aspire Mining vs. Westpac Banking | Aspire Mining vs. Microequities Asset Management | Aspire Mining vs. Steamships Trading | Aspire Mining vs. Argo Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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