Correlation Between Energy Technologies and Auswide Bank
Can any of the company-specific risk be diversified away by investing in both Energy Technologies and Auswide Bank 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 Energy Technologies and Auswide Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Technologies Limited and Auswide Bank, you can compare the effects of market volatilities on Energy Technologies and Auswide Bank 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 Energy Technologies with a short position of Auswide Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Technologies and Auswide Bank.
Diversification Opportunities for Energy Technologies and Auswide Bank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Energy and Auswide is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Energy Technologies Limited and Auswide Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auswide Bank and Energy Technologies 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 Energy Technologies Limited are associated (or correlated) with Auswide Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auswide Bank has no effect on the direction of Energy Technologies i.e., Energy Technologies and Auswide Bank go up and down completely randomly.
Pair Corralation between Energy Technologies and Auswide Bank
Assuming the 90 days trading horizon Energy Technologies Limited is expected to under-perform the Auswide Bank. In addition to that, Energy Technologies is 1.12 times more volatile than Auswide Bank. It trades about -0.06 of its total potential returns per unit of risk. Auswide Bank is currently generating about 0.15 per unit of volatility. If you would invest 404.00 in Auswide Bank on September 25, 2024 and sell it today you would earn a total of 91.00 from holding Auswide Bank or generate 22.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Energy Technologies Limited vs. Auswide Bank
Performance |
Timeline |
Energy Technologies |
Auswide Bank |
Energy Technologies and Auswide Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Energy Technologies and Auswide Bank
The main advantage of trading using opposite Energy Technologies and Auswide Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Technologies position performs unexpectedly, Auswide Bank 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 Auswide Bank will offset losses from the drop in Auswide Bank's long position.Energy Technologies vs. Audio Pixels Holdings | Energy Technologies vs. Nsx | Energy Technologies vs. TTG Fintech | Energy Technologies vs. Land Homes Group |
Auswide Bank vs. Energy Technologies Limited | Auswide Bank vs. Aristocrat Leisure | Auswide Bank vs. Readytech Holdings | Auswide Bank vs. Falcon Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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