Correlation Between Suncorp and Aspire Mining

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

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

Diversification Opportunities for Suncorp and Aspire Mining

-0.45

Correlation Coefficient

Suncorp  Aspire Mining

Very good diversification

The 3 months correlation between Suncorp and Aspire is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Suncorp Group and Aspire Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspire Mining and Suncorp 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 Suncorp Group are associated (or correlated) with Aspire Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspire Mining has no effect on the direction of Suncorp i.e., Suncorp and Aspire Mining go up and down completely randomly.

Pair Corralation between Suncorp and Aspire Mining

Assuming the 90 days trading horizon Suncorp Group is expected to generate 0.39 times more return on investment than Aspire Mining. However, Suncorp Group is 2.55 times less risky than Aspire Mining. It trades about -0.05 of its potential returns per unit of risk. Aspire Mining is currently generating about -0.03 per unit of risk. If you would invest  1,984  in Suncorp Group on October 7, 2024 and sell it today you would lose (29.00) from holding Suncorp Group or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Suncorp Group  vs.  Aspire Mining

Suncorp Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Suncorp Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Suncorp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aspire Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspire Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Suncorp and Aspire Mining

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

The idea behind Suncorp Group and Aspire Mining 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.