Correlation Between Alternative Investment and Australian Strategic

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

By analyzing existing cross correlation between Alternative Investment Trust and Australian Strategic Materials, you can compare the effects of market volatilities on Alternative Investment and Australian Strategic 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 Alternative Investment with a short position of Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and Australian Strategic.

Diversification Opportunities for Alternative Investment and Australian Strategic

-0.67

Correlation Coefficient

Alternative Investment  Australian Strategic

Excellent diversification

The 3 months correlation between Alternative and Australian is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic and Alternative Investment 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 Alternative Investment Trust are associated (or correlated) with Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of Alternative Investment i.e., Alternative Investment and Australian Strategic go up and down completely randomly.

Pair Corralation between Alternative Investment and Australian Strategic

Assuming the 90 days trading horizon Alternative Investment is expected to generate 1231.0 times less return on investment than Australian Strategic. But when comparing it to its historical volatility, Alternative Investment Trust is 12.64 times less risky than Australian Strategic. It trades about 0.0 of its potential returns per unit of risk. Australian Strategic Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Australian Strategic Materials on September 30, 2024 and sell it today you would earn a total of  2.00  from holding Australian Strategic Materials or generate 4.26% return on investment over 90 days.

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

Alternative Investment Trust  vs.  Australian Strategic Materials

Alternative Investment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alternative Investment Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alternative Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Australian Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alternative Investment and Australian Strategic

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

The idea behind Alternative Investment Trust and Australian Strategic Materials 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.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.