Correlation Between SUNCORP PREF and Bennelong Australian

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

By analyzing existing cross correlation between SUNCORP PREF CPS3 and Bennelong Australian Equities, you can compare the effects of market volatilities on SUNCORP PREF 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 SUNCORP PREF with a short position of Bennelong Australian. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNCORP PREF and Bennelong Australian.

Diversification Opportunities for SUNCORP PREF and Bennelong Australian

0.0

Correlation Coefficient

SUNCORP PREF  Bennelong Australian

Pay attention - limited upside

The 3 months correlation between SUNCORP and Bennelong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SUNCORP PREF CPS3 and Bennelong Australian Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bennelong Australian and SUNCORP PREF 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 PREF CPS3 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 SUNCORP PREF i.e., SUNCORP PREF and Bennelong Australian go up and down completely randomly.

Pair Corralation between SUNCORP PREF and Bennelong Australian

If you would invest (100.00) in Bennelong Australian Equities on October 25, 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

SUNCORP PREF CPS3  vs.  Bennelong Australian Equities

SUNCORP PREF CPS3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUNCORP PREF CPS3 has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, SUNCORP PREF 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

0 of 100

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 SUNCORP PREF and Bennelong Australian

The main advantage of trading using opposite SUNCORP PREF and Bennelong Australian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNCORP PREF 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 SUNCORP PREF CPS3 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.