Correlation Between BANK QLD and Bennelong Australian

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

By analyzing existing cross correlation between BANK QLD PREF and Bennelong Australian Equities, you can compare the effects of market volatilities on BANK QLD and Bennelong Australian 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 BANK QLD with a short position of Bennelong Australian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK QLD and Bennelong Australian.

Diversification Opportunities for BANK QLD and Bennelong Australian

0.0

Correlation Coefficient

BANK QLD  Bennelong Australian

Pay attention - limited upside

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

Pair Corralation between BANK QLD and Bennelong Australian

If you would invest (100.00) in Bennelong Australian Equities on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Bennelong Australian Equities or generate -100.0% return on investment over 90 days.

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

BANK QLD PREF  vs.  Bennelong Australian Equities

BANK QLD PREF

Risk-Adjusted Performance

Very Weak

Over the last 90 days BANK QLD PREF has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, BANK QLD is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bennelong Australian

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bennelong Australian Equities has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Bennelong Australian is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BANK QLD and Bennelong Australian

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

The idea behind BANK QLD PREF and Bennelong Australian Equities 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.