Correlation Between Westpac Banking and Bennelong Australian

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

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

Diversification Opportunities for Westpac Banking and Bennelong Australian

0.0

Correlation Coefficient

Westpac Banking  Bennelong Australian

Pay attention - limited upside

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

Pair Corralation between Westpac Banking and Bennelong Australian

If you would invest (100.00) in Bennelong Australian Equities on December 22, 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

Westpac Banking Corp  vs.  Bennelong Australian Equities

Westpac Banking Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westpac Banking Corp has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Westpac Banking is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bennelong Australian

Risk-Adjusted Performance

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 Westpac Banking and Bennelong Australian

The main advantage of trading using opposite Westpac Banking and Bennelong Australian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking 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 Westpac Banking Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.