Correlation Between Wesfarmers and Arc Funds
Can any of the company-specific risk be diversified away by investing in both Wesfarmers and Arc Funds 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 Wesfarmers and Arc Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesfarmers and Arc Funds, you can compare the effects of market volatilities on Wesfarmers and Arc Funds 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 Wesfarmers with a short position of Arc Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesfarmers and Arc Funds.
Diversification Opportunities for Wesfarmers and Arc Funds
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wesfarmers and Arc is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Wesfarmers and Arc Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arc Funds and Wesfarmers 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 Wesfarmers are associated (or correlated) with Arc Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arc Funds has no effect on the direction of Wesfarmers i.e., Wesfarmers and Arc Funds go up and down completely randomly.
Pair Corralation between Wesfarmers and Arc Funds
If you would invest (100.00) in Wesfarmers on October 25, 2024 and sell it today you would earn a total of 100.00 from holding Wesfarmers or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Wesfarmers vs. Arc Funds
Performance |
| Timeline |
| Wesfarmers |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Arc Funds |
Wesfarmers and Arc Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesfarmers and Arc Funds
The main advantage of trading using opposite Wesfarmers and Arc Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesfarmers position performs unexpectedly, Arc Funds 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 Arc Funds will offset losses from the drop in Arc Funds' long position.| Wesfarmers vs. Embark Education Group | Wesfarmers vs. Complii FinTech Solutions | Wesfarmers vs. Carawine Resources Limited | Wesfarmers vs. G8 Education |
| Arc Funds vs. Ras Technology Holdings | Arc Funds vs. Southern Hemisphere Mining | Arc Funds vs. Sports Entertainment Group | Arc Funds vs. Computershare |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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