Correlation Between Aussie Broadband and MoneyMe

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

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

Diversification Opportunities for Aussie Broadband and MoneyMe

-0.51

Correlation Coefficient

Aussie Broadband  MoneyMe

Excellent diversification

The 3 months correlation between Aussie and MoneyMe is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aussie Broadband and MoneyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyMe and Aussie Broadband 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 Aussie Broadband are associated (or correlated) with MoneyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyMe has no effect on the direction of Aussie Broadband i.e., Aussie Broadband and MoneyMe go up and down completely randomly.

Pair Corralation between Aussie Broadband and MoneyMe

Assuming the 90 days trading horizon Aussie Broadband is expected to generate 17.55 times less return on investment than MoneyMe. But when comparing it to its historical volatility, Aussie Broadband is 2.09 times less risky than MoneyMe. It trades about 0.01 of its potential returns per unit of risk. MoneyMe is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  10.00  in MoneyMe on October 9, 2024 and sell it today you would earn a total of  9.00  from holding MoneyMe or generate 90.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Aussie Broadband  vs.  MoneyMe

Aussie Broadband

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aussie Broadband has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

MoneyMe

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MoneyMe are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, MoneyMe unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aussie Broadband and MoneyMe

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

The idea behind Aussie Broadband and MoneyMe 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.