Correlation Between Australis Capital and Halo Collective

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

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

Diversification Opportunities for Australis Capital and Halo Collective

0.0

Correlation Coefficient

Australis Capital  Halo Collective

Pay attention - limited upside

The 3 months correlation between Australis and Halo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Australis Capital and Halo Collective in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halo Collective and Australis Capital 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 Australis Capital are associated (or correlated) with Halo Collective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halo Collective has no effect on the direction of Australis Capital i.e., Australis Capital and Halo Collective go up and down completely randomly.

Pair Corralation between Australis Capital and Halo Collective

Assuming the 90 days horizon Australis Capital is expected to generate 1.53 times more return on investment than Halo Collective. However, Australis Capital is 1.53 times more volatile than Halo Collective. It trades about 0.09 of its potential returns per unit of risk. Halo Collective is currently generating about 0.06 per unit of risk. If you would invest  4.40  in Australis Capital on September 29, 2024 and sell it today you would lose (4.39) from holding Australis Capital or give up 99.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Australis Capital  vs.  Halo Collective

Australis Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Australis Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Halo Collective

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Halo Collective has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Halo Collective is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Australis Capital and Halo Collective

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

The idea behind Australis Capital and Halo Collective 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.