Correlation Between AGI Greenpac and Steel Authority
Can any of the company-specific risk be diversified away by investing in both AGI Greenpac and Steel Authority 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 AGI Greenpac and Steel Authority into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGI Greenpac Limited and Steel Authority of, you can compare the effects of market volatilities on AGI Greenpac and Steel Authority 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 AGI Greenpac with a short position of Steel Authority. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGI Greenpac and Steel Authority.
Diversification Opportunities for AGI Greenpac and Steel Authority
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between AGI and Steel is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AGI Greenpac Limited and Steel Authority of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Authority and AGI Greenpac 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 AGI Greenpac Limited are associated (or correlated) with Steel Authority. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Authority has no effect on the direction of AGI Greenpac i.e., AGI Greenpac and Steel Authority go up and down completely randomly.
Pair Corralation between AGI Greenpac and Steel Authority
Assuming the 90 days trading horizon AGI Greenpac Limited is expected to generate 49.65 times more return on investment than Steel Authority. However, AGI Greenpac is 49.65 times more volatile than Steel Authority of. It trades about 0.13 of its potential returns per unit of risk. Steel Authority of is currently generating about 0.05 per unit of risk. If you would invest 63,229 in AGI Greenpac Limited on September 12, 2024 and sell it today you would earn a total of 61,836 from holding AGI Greenpac Limited or generate 97.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.72% |
| Values | Daily Returns |
AGI Greenpac Limited vs. Steel Authority of
Performance |
| Timeline |
| AGI Greenpac Limited |
| Steel Authority |
AGI Greenpac and Steel Authority Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGI Greenpac and Steel Authority
The main advantage of trading using opposite AGI Greenpac and Steel Authority positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGI Greenpac position performs unexpectedly, Steel Authority 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 Steel Authority will offset losses from the drop in Steel Authority's long position.| AGI Greenpac vs. Steel Authority of | AGI Greenpac vs. Embassy Office Parks | AGI Greenpac vs. Indian Metals Ferro | AGI Greenpac vs. JTL Industries |
| Steel Authority vs. Embassy Office Parks | Steel Authority vs. Indian Metals Ferro | Steel Authority vs. JTL Industries |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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