Correlation Between Bank of Queensland and Medibank Private
Can any of the company-specific risk be diversified away by investing in both Bank of Queensland and Medibank Private 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 Medibank Private 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 Medibank Private, you can compare the effects of market volatilities on Bank of Queensland and Medibank Private 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 Medibank Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Queensland and Medibank Private.
Diversification Opportunities for Bank of Queensland and Medibank Private
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Medibank is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Queensland and Medibank Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medibank Private 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 Medibank Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medibank Private has no effect on the direction of Bank of Queensland i.e., Bank of Queensland and Medibank Private go up and down completely randomly.
Pair Corralation between Bank of Queensland and Medibank Private
Assuming the 90 days trading horizon Bank of Queensland is expected to generate 3.65 times less return on investment than Medibank Private. But when comparing it to its historical volatility, Bank of Queensland is 1.96 times less risky than Medibank Private. It trades about 0.04 of its potential returns per unit of risk. Medibank Private is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 377.00 in Medibank Private on September 28, 2024 and sell it today you would earn a total of 4.00 from holding Medibank Private or generate 1.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Bank of Queensland vs. Medibank Private
Performance |
Timeline |
Bank of Queensland |
Medibank Private |
Bank of Queensland and Medibank Private Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bank of Queensland and Medibank Private
The main advantage of trading using opposite Bank of Queensland and Medibank Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Queensland position performs unexpectedly, Medibank Private 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 Medibank Private will offset losses from the drop in Medibank Private's long position.Bank of Queensland vs. Mystate | Bank of Queensland vs. LGI | Bank of Queensland vs. Supply Network | Bank of Queensland vs. Arrow Minerals |
Medibank Private vs. MA Financial Group | Medibank Private vs. Ainsworth Game Technology | Medibank Private vs. Finexia Financial Group | Medibank Private vs. Australian Unity Office |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |