Correlation Between AUSNUTRIA DAIRY and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both AUSNUTRIA DAIRY and WIMFARM SA 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 AUSNUTRIA DAIRY and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSNUTRIA DAIRY and WIMFARM SA EO, you can compare the effects of market volatilities on AUSNUTRIA DAIRY and WIMFARM SA 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 AUSNUTRIA DAIRY with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSNUTRIA DAIRY and WIMFARM SA.
Diversification Opportunities for AUSNUTRIA DAIRY and WIMFARM SA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUSNUTRIA and WIMFARM is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and WIMFARM SA go up and down completely randomly.
Pair Corralation between AUSNUTRIA DAIRY and WIMFARM SA
Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to generate 0.62 times more return on investment than WIMFARM SA. However, AUSNUTRIA DAIRY is 1.63 times less risky than WIMFARM SA. It trades about -0.03 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.06 per unit of risk. If you would invest 35.00 in AUSNUTRIA DAIRY on October 18, 2024 and sell it today you would lose (12.00) from holding AUSNUTRIA DAIRY or give up 34.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUSNUTRIA DAIRY vs. WIMFARM SA EO
Performance |
| Timeline |
| AUSNUTRIA DAIRY |
| WIMFARM SA EO |
AUSNUTRIA DAIRY and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSNUTRIA DAIRY and WIMFARM SA
The main advantage of trading using opposite AUSNUTRIA DAIRY and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSNUTRIA DAIRY position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| AUSNUTRIA DAIRY vs. China Eastern Airlines | AUSNUTRIA DAIRY vs. Ryanair Holdings plc | AUSNUTRIA DAIRY vs. SBM OFFSHORE | AUSNUTRIA DAIRY vs. Aegean Airlines SA |
| WIMFARM SA vs. InPlay Oil Corp | WIMFARM SA vs. AUSNUTRIA DAIRY | WIMFARM SA vs. Cal Maine Foods | WIMFARM SA vs. TRAVEL LEISURE DL 01 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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