Correlation Between AGCO and GP Solutions
Can any of the company-specific risk be diversified away by investing in both AGCO and GP Solutions 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 AGCO and GP Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGCO Corporation and GP Solutions, you can compare the effects of market volatilities on AGCO and GP Solutions 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 AGCO with a short position of GP Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGCO and GP Solutions.
Diversification Opportunities for AGCO and GP Solutions
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AGCO and GWPD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AGCO Corp. and GP Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Solutions and AGCO 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 AGCO Corporation are associated (or correlated) with GP Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Solutions has no effect on the direction of AGCO i.e., AGCO and GP Solutions go up and down completely randomly.
Pair Corralation between AGCO and GP Solutions
If you would invest 10.00 in GP Solutions on September 2, 2024 and sell it today you would earn a total of 0.00 from holding GP Solutions or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
AGCO Corp. vs. GP Solutions
Performance |
| Timeline |
| AGCO |
| GP Solutions |
AGCO and GP Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGCO and GP Solutions
The main advantage of trading using opposite AGCO and GP Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGCO position performs unexpectedly, GP Solutions 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 GP Solutions will offset losses from the drop in GP Solutions' long position.The idea behind AGCO Corporation and GP Solutions 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.| GP Solutions vs. AGCO Corporation | GP Solutions vs. Nikola Corp | GP Solutions vs. PACCAR Inc | GP Solutions vs. Deere Company |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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