Correlation Between Ag Growth and Lindsay
Can any of the company-specific risk be diversified away by investing in both Ag Growth and Lindsay 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 Ag Growth and Lindsay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ag Growth International and Lindsay, you can compare the effects of market volatilities on Ag Growth and Lindsay 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 Ag Growth with a short position of Lindsay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ag Growth and Lindsay.
Diversification Opportunities for Ag Growth and Lindsay
Significant diversification
The 3 months correlation between AGGZF and Lindsay is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ag Growth International and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay and Ag Growth 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 Ag Growth International are associated (or correlated) with Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of Ag Growth i.e., Ag Growth and Lindsay go up and down completely randomly.
Pair Corralation between Ag Growth and Lindsay
Assuming the 90 days horizon Ag Growth International is expected to under-perform the Lindsay. In addition to that, Ag Growth is 2.98 times more volatile than Lindsay. It trades about -0.29 of its total potential returns per unit of risk. Lindsay is currently generating about 0.32 per unit of volatility. If you would invest 12,261 in Lindsay on October 21, 2024 and sell it today you would earn a total of 1,043 from holding Lindsay or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ag Growth International vs. Lindsay
Performance |
| Timeline |
| Ag Growth International |
| Lindsay |
Ag Growth and Lindsay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ag Growth and Lindsay
The main advantage of trading using opposite Ag Growth and Lindsay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ag Growth position performs unexpectedly, Lindsay 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 Lindsay will offset losses from the drop in Lindsay's long position.| Ag Growth vs. First Tractor | Ag Growth vs. AmeraMex International | Ag Growth vs. Arts Way Manufacturing Co | Ag Growth vs. American Premium Water |
| Lindsay vs. Columbus McKinnon | Lindsay vs. Astec Industries | Lindsay vs. Shyft Group | Lindsay vs. AGCO Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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