Correlation Between Argo Investments and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Argo Investments and Westpac Banking 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 Argo Investments and Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and Westpac Banking Corp, you can compare the effects of market volatilities on Argo Investments and Westpac Banking 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 Argo Investments with a short position of Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and Westpac Banking.
Diversification Opportunities for Argo Investments and Westpac Banking
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Argo and Westpac is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments and Westpac Banking Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking Corp and Argo Investments 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 Argo Investments are associated (or correlated) with Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking Corp has no effect on the direction of Argo Investments i.e., Argo Investments and Westpac Banking go up and down completely randomly.
Pair Corralation between Argo Investments and Westpac Banking
Assuming the 90 days trading horizon Argo Investments is expected to generate 0.44 times more return on investment than Westpac Banking. However, Argo Investments is 2.28 times less risky than Westpac Banking. It trades about -0.03 of its potential returns per unit of risk. Westpac Banking Corp is currently generating about -0.02 per unit of risk. If you would invest 883.00 in Argo Investments on December 29, 2024 and sell it today you would lose (9.00) from holding Argo Investments or give up 1.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Argo Investments vs. Westpac Banking Corp
Performance |
Timeline |
Argo Investments |
Westpac Banking Corp |
Argo Investments and Westpac Banking Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Argo Investments and Westpac Banking
The main advantage of trading using opposite Argo Investments and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.Argo Investments vs. Australian United Investment | Argo Investments vs. Carlton Investments | Argo Investments vs. Event Hospitality and | Argo Investments vs. Auctus Alternative Investments |
Westpac Banking vs. Ainsworth Game Technology | Westpac Banking vs. Aristocrat Leisure | Westpac Banking vs. Thorney Technologies | Westpac Banking vs. Australian Agricultural |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |