Correlation Between ANZ Group and Mindax

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

Diversification Opportunities for ANZ Group and Mindax

-0.68

Correlation Coefficient

ANZ Group  Mindax

Excellent diversification

The 3 months correlation between ANZ and Mindax is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ANZ Group Holdings and Mindax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindax Limited 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 Mindax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindax Limited has no effect on the direction of ANZ Group i.e., ANZ Group and Mindax go up and down completely randomly.

Pair Corralation between ANZ Group and Mindax

Assuming the 90 days trading horizon ANZ Group Holdings is expected to generate 0.03 times more return on investment than Mindax. However, ANZ Group Holdings is 30.97 times less risky than Mindax. It trades about 0.16 of its potential returns per unit of risk. Mindax Limited is currently generating about -0.01 per unit of risk. If you would invest  10,230  in ANZ Group Holdings on September 23, 2024 and sell it today you would earn a total of  58.00  from holding ANZ Group Holdings or generate 0.57% return on investment over 90 days.

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

ANZ Group Holdings  vs.  Mindax Limited

ANZ Group Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANZ Group Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Mindax Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindax Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mindax 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 Mindax

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

The idea behind ANZ Group Holdings and Mindax Limited 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.