Correlation Between Bank of Queensland and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Advanced Braking 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 of Queensland and Advanced Braking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of Queensland and Advanced Braking Technology, you can compare the effects of market volatilities on Bank of Queensland and Advanced Braking 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 of Queensland with a short position of Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Advanced Braking.
Diversification Opportunities for Bank of Queensland and Advanced Braking
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Advanced is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec and Bank of Queensland 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 of Queensland are associated (or correlated) with Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Advanced Braking go up and down completely randomly.
Pair Corralation between Bank of Queensland and Advanced Braking
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 0.12 times more return on investment than Advanced Braking. However, Bank of Queensland is 8.37 times less risky than Advanced Braking. It trades about -0.02 of its potential returns per unit of risk. Advanced Braking Technology is currently generating about -0.13 per unit of risk. If you would invest 10,396 in Bank of Queensland on September 24, 2024 and sell it today you would lose (16.00) from holding Bank of Queensland or give up 0.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Queensland vs. Advanced Braking Technology
Performance |
Timeline |
Bank of Queensland |
Advanced Braking Tec |
Bank of Queensland and Advanced Braking Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Queensland and Advanced Braking
The main advantage of trading using opposite Bank of Queensland and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Advanced Braking 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 Advanced Braking will offset losses from the drop in Advanced Braking's long position.Bank of Queensland vs. Advanced Braking Technology | Bank of Queensland vs. Computershare | Bank of Queensland vs. Beston Global Food | Bank of Queensland vs. Thorney Technologies |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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