Correlation Between REMEDY ENTERTAINMENT and Nufarm
Can any of the company-specific risk be diversified away by investing in both REMEDY ENTERTAINMENT and Nufarm 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 REMEDY ENTERTAINMENT and Nufarm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REMEDY ENTERTAINMENT OYJ and Nufarm Limited, you can compare the effects of market volatilities on REMEDY ENTERTAINMENT and Nufarm 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 REMEDY ENTERTAINMENT with a short position of Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of REMEDY ENTERTAINMENT and Nufarm.
Diversification Opportunities for REMEDY ENTERTAINMENT and Nufarm
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between REMEDY and Nufarm is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding REMEDY ENTERTAINMENT OYJ and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Limited and REMEDY ENTERTAINMENT 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 REMEDY ENTERTAINMENT OYJ are associated (or correlated) with Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of REMEDY ENTERTAINMENT i.e., REMEDY ENTERTAINMENT and Nufarm go up and down completely randomly.
Pair Corralation between REMEDY ENTERTAINMENT and Nufarm
Assuming the 90 days horizon REMEDY ENTERTAINMENT OYJ is expected to generate 1.35 times more return on investment than Nufarm. However, REMEDY ENTERTAINMENT is 1.35 times more volatile than Nufarm Limited. It trades about -0.02 of its potential returns per unit of risk. Nufarm Limited is currently generating about -0.03 per unit of risk. If you would invest 2,230 in REMEDY ENTERTAINMENT OYJ on November 28, 2024 and sell it today you would lose (810.00) from holding REMEDY ENTERTAINMENT OYJ or give up 36.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REMEDY ENTERTAINMENT OYJ vs. Nufarm Limited
Performance |
| Timeline |
| REMEDY ENTERTAINMENT OYJ |
| Nufarm Limited |
REMEDY ENTERTAINMENT and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REMEDY ENTERTAINMENT and Nufarm
The main advantage of trading using opposite REMEDY ENTERTAINMENT and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REMEDY ENTERTAINMENT position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.| REMEDY ENTERTAINMENT vs. Evolution Mining Limited | REMEDY ENTERTAINMENT vs. BAKED GAMES SA | REMEDY ENTERTAINMENT vs. Games Workshop Group | REMEDY ENTERTAINMENT vs. ADRIATIC METALS LS 013355 |
| Nufarm vs. Cleanaway Waste Management | Nufarm vs. CALTAGIRONE EDITORE | Nufarm vs. CSSC Offshore Marine | Nufarm vs. CVW CLEANTECH INC |
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 Stocks Directory module to find actively traded stocks across global markets.
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