Correlation Between ANZ Group and British Amer

Can any of the company-specific risk be diversified away by investing in both ANZ Group and British Amer 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 British Amer 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 Bailador Technology Invest, you can compare the effects of market volatilities on ANZ Group and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANZ Group and British Amer.

Diversification Opportunities for ANZ Group and British Amer

0.29

Correlation Coefficient

ANZ Group  British Amer

Modest diversification

The 3 months correlation between ANZ and British is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of ANZ Group i.e., ANZ Group and British Amer go up and down completely randomly.

Pair Corralation between ANZ Group and British Amer

Assuming the 90 days trading horizon ANZ Group is expected to generate 1.39 times less return on investment than British Amer. But when comparing it to its historical volatility, ANZ Group Holdings is 4.14 times less risky than British Amer. It trades about 0.04 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  114.00  in Bailador Technology Invest on October 5, 2024 and sell it today you would earn a total of  6.00  from holding Bailador Technology Invest or generate 5.26% return on investment over 90 days.

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

ANZ Group Holdings  vs.  Bailador Technology Invest

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 somewhat strong basic indicators, ANZ Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Bailador Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bailador Technology Invest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, British Amer is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ANZ Group and British Amer

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

The idea behind ANZ Group Holdings and Bailador Technology Invest 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.