Correlation Between Wildcat Resources and Qantas Airways
Can any of the company-specific risk be diversified away by investing in both Wildcat Resources and Qantas Airways 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 Wildcat Resources and Qantas Airways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wildcat Resources and Qantas Airways, you can compare the effects of market volatilities on Wildcat Resources and Qantas Airways 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 Wildcat Resources with a short position of Qantas Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wildcat Resources and Qantas Airways.
Diversification Opportunities for Wildcat Resources and Qantas Airways
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wildcat and Qantas is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Wildcat Resources and Qantas Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qantas Airways and Wildcat Resources 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 Wildcat Resources are associated (or correlated) with Qantas Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qantas Airways has no effect on the direction of Wildcat Resources i.e., Wildcat Resources and Qantas Airways go up and down completely randomly.
Pair Corralation between Wildcat Resources and Qantas Airways
Assuming the 90 days trading horizon Wildcat Resources is expected to generate 2.82 times more return on investment than Qantas Airways. However, Wildcat Resources is 2.82 times more volatile than Qantas Airways. It trades about 0.15 of its potential returns per unit of risk. Qantas Airways is currently generating about 0.13 per unit of risk. If you would invest 24.00 in Wildcat Resources on October 12, 2024 and sell it today you would earn a total of 3.00 from holding Wildcat Resources or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wildcat Resources vs. Qantas Airways
Performance |
| Timeline |
| Wildcat Resources |
| Qantas Airways |
Wildcat Resources and Qantas Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wildcat Resources and Qantas Airways
The main advantage of trading using opposite Wildcat Resources and Qantas Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wildcat Resources position performs unexpectedly, Qantas Airways 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 Qantas Airways will offset losses from the drop in Qantas Airways' long position.| Wildcat Resources vs. Aeon Metals | Wildcat Resources vs. Centrex Metals | Wildcat Resources vs. Centuria Industrial Reit | Wildcat Resources vs. Aussie Broadband |
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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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