Correlation Between AGCO and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both AGCO and Sany Heavy 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 Sany Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGCO Corporation and Sany Heavy Equipment, you can compare the effects of market volatilities on AGCO and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGCO and Sany Heavy.
Diversification Opportunities for AGCO and Sany Heavy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGCO and Sany is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AGCO Corp. and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of AGCO i.e., AGCO and Sany Heavy go up and down completely randomly.
Pair Corralation between AGCO and Sany Heavy
Assuming the 90 days horizon AGCO Corporation is expected to generate 0.92 times more return on investment than Sany Heavy. However, AGCO Corporation is 1.09 times less risky than Sany Heavy. It trades about 0.13 of its potential returns per unit of risk. Sany Heavy Equipment is currently generating about 0.02 per unit of risk. If you would invest 9,011 in AGCO Corporation on September 3, 2024 and sell it today you would earn a total of 709.00 from holding AGCO Corporation or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGCO Corp. vs. Sany Heavy Equipment
Performance |
| Timeline |
| AGCO |
| Sany Heavy Equipment |
AGCO and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGCO and Sany Heavy
The main advantage of trading using opposite AGCO and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGCO position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.| AGCO vs. Komatsu | AGCO vs. CNH Industrial NV | AGCO vs. KUBOTA P ADR20 | AGCO vs. Hitachi Construction Machinery |
| Sany Heavy vs. United Rentals | Sany Heavy vs. SHIP HEALTHCARE HLDGINC | Sany Heavy vs. Air Lease | Sany Heavy vs. DXC Technology Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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