Correlation Between X2M Connect and ANZ Group
Can any of the company-specific risk be diversified away by investing in both X2M Connect and ANZ Group 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 X2M Connect and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X2M Connect and ANZ Group Holdings, you can compare the effects of market volatilities on X2M Connect and ANZ Group 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 X2M Connect with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of X2M Connect and ANZ Group.
Diversification Opportunities for X2M Connect and ANZ Group
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between X2M and ANZ is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding X2M Connect and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and X2M Connect 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 X2M Connect are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of X2M Connect i.e., X2M Connect and ANZ Group go up and down completely randomly.
Pair Corralation between X2M Connect and ANZ Group
Assuming the 90 days trading horizon X2M Connect is expected to under-perform the ANZ Group. In addition to that, X2M Connect is 29.3 times more volatile than ANZ Group Holdings. It trades about -0.15 of its total potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.25 per unit of volatility. If you would invest 10,291 in ANZ Group Holdings on December 1, 2024 and sell it today you would earn a total of 96.00 from holding ANZ Group Holdings or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
X2M Connect vs. ANZ Group Holdings
Performance |
| Timeline |
| X2M Connect |
| ANZ Group Holdings |
X2M Connect and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X2M Connect and ANZ Group
The main advantage of trading using opposite X2M Connect and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X2M Connect position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| X2M Connect vs. Perpetual Credit Income | X2M Connect vs. Sonic Healthcare | X2M Connect vs. Health and Plant | X2M Connect vs. Fisher Paykel Healthcare |
| ANZ Group vs. Australian United Investment | ANZ Group vs. A1 Investments Resources | ANZ Group vs. Auctus Alternative Investments | ANZ Group vs. Hudson Investment 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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