Correlation Between Westpac Banking and Imugene
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Imugene 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 Imugene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Imugene, you can compare the effects of market volatilities on Westpac Banking and Imugene 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 Imugene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Imugene.
Diversification Opportunities for Westpac Banking and Imugene
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westpac and Imugene is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene 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 Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Westpac Banking i.e., Westpac Banking and Imugene go up and down completely randomly.
Pair Corralation between Westpac Banking and Imugene
Assuming the 90 days trading horizon Westpac Banking is expected to generate 0.06 times more return on investment than Imugene. However, Westpac Banking is 16.17 times less risky than Imugene. It trades about 0.11 of its potential returns per unit of risk. Imugene is currently generating about -0.03 per unit of risk. If you would invest 9,775 in Westpac Banking on August 30, 2024 and sell it today you would earn a total of 811.00 from holding Westpac Banking or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 47.19% |
| Values | Daily Returns |
Westpac Banking vs. Imugene
Performance |
| Timeline |
| Westpac Banking |
| Imugene |
Westpac Banking and Imugene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Imugene
The main advantage of trading using opposite Westpac Banking and Imugene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Imugene 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 Imugene will offset losses from the drop in Imugene's long position.| Westpac Banking vs. Champion Iron | Westpac Banking vs. Ridley | Westpac Banking vs. Australian Dairy Farms | Westpac Banking vs. Perpetual Credit Income |
| Imugene vs. Westpac Banking | Imugene vs. Hutchison Telecommunications | Imugene vs. Kkr Credit Income | Imugene vs. Autosports Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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