Correlation Between Hunter Creek and ANZ Group

Can any of the company-specific risk be diversified away by investing in both Hunter Creek and ANZ Group 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 Hunter Creek and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hunter Creek Mining and ANZ Group Holdings, you can compare the effects of market volatilities on Hunter Creek and ANZ Group 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 Hunter Creek with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunter Creek and ANZ Group.

Diversification Opportunities for Hunter Creek and ANZ Group

0.21

Correlation Coefficient

Hunter Creek  ANZ Group

Modest diversification

The 3 months correlation between Hunter and ANZ is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hunter Creek Mining and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Hunter Creek 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 Hunter Creek Mining are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Hunter Creek i.e., Hunter Creek and ANZ Group go up and down completely randomly.

Pair Corralation between Hunter Creek and ANZ Group

Given the investment horizon of 90 days Hunter Creek Mining is expected to generate 97.05 times more return on investment than ANZ Group. However, Hunter Creek is 97.05 times more volatile than ANZ Group Holdings. It trades about 0.1 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.07 per unit of risk. If you would invest  9.80  in Hunter Creek Mining on December 20, 2024 and sell it today you would lose (9.80) from holding Hunter Creek Mining or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

Hunter Creek Mining  vs.  ANZ Group Holdings

Hunter Creek Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hunter Creek Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hunter Creek exhibited solid returns over the last few months and may actually be approaching a breakup point.

ANZ Group Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANZ Group Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, ANZ Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hunter Creek and ANZ Group

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

The idea behind Hunter Creek Mining and ANZ Group Holdings 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.