Correlation Between Westpac Banking and Group 6

Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Group 6 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 Group 6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Westpac Banking and Group 6 Metals, you can compare the effects of market volatilities on Westpac Banking and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Group 6.

Diversification Opportunities for Westpac Banking and Group 6

0.0

Correlation Coefficient

Westpac Banking  Group 6

Pay attention - limited upside

The 3 months correlation between Westpac and Group is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 are associated (or correlated) with Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of Westpac Banking i.e., Westpac Banking and Group 6 go up and down completely randomly.

Pair Corralation between Westpac Banking and Group 6

If you would invest  10,403  in Westpac Banking on April 25, 2025 and sell it today you would earn a total of  177.00  from holding Westpac Banking or generate 1.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Westpac Banking  vs.  Group 6 Metals

Westpac Banking

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Westpac Banking are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Westpac Banking is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Group 6 Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Group 6 Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Group 6 is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Westpac Banking and Group 6

The main advantage of trading using opposite Westpac Banking and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.

The idea behind Westpac Banking and Group 6 Metals 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.