Correlation Between ANZ Group and Barclays PLC

Can any of the company-specific risk be diversified away by investing in both ANZ Group and Barclays PLC 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 ANZ Group and Barclays PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANZ Group Holdings and Barclays PLC, you can compare the effects of market volatilities on ANZ Group and Barclays PLC 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 ANZ Group with a short position of Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and Barclays PLC.

Diversification Opportunities for ANZ Group and Barclays PLC

-0.14

Correlation Coefficient

ANZ Group  Barclays PLC

Good diversification

The 3 months correlation between ANZ and Barclays is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC and ANZ Group 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 ANZ Group Holdings are associated (or correlated) with Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of ANZ Group i.e., ANZ Group and Barclays PLC go up and down completely randomly.

Pair Corralation between ANZ Group and Barclays PLC

If you would invest  297.00  in Barclays PLC on September 4, 2024 and sell it today you would earn a total of  35.00  from holding Barclays PLC or generate 11.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

ANZ Group Holdings  vs.  Barclays PLC

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ANZ Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Barclays PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barclays PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Barclays PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANZ Group and Barclays PLC

The main advantage of trading using opposite ANZ Group and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANZ Group position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.

The idea behind ANZ Group Holdings and Barclays PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.