Correlation Between AgriBank Securities and Investment
Can any of the company-specific risk be diversified away by investing in both AgriBank Securities and Investment 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 AgriBank Securities and Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AgriBank Securities JSC and Investment and Industrial, you can compare the effects of market volatilities on AgriBank Securities and Investment 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 AgriBank Securities with a short position of Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriBank Securities and Investment.
Diversification Opportunities for AgriBank Securities and Investment
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AgriBank and Investment is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AgriBank Securities JSC and Investment and Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment and Industrial and AgriBank Securities 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 AgriBank Securities JSC are associated (or correlated) with Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment and Industrial has no effect on the direction of AgriBank Securities i.e., AgriBank Securities and Investment go up and down completely randomly.
Pair Corralation between AgriBank Securities and Investment
Assuming the 90 days trading horizon AgriBank Securities JSC is expected to under-perform the Investment. In addition to that, AgriBank Securities is 1.37 times more volatile than Investment and Industrial. It trades about -0.02 of its total potential returns per unit of risk. Investment and Industrial is currently generating about -0.01 per unit of volatility. If you would invest 6,790,000 in Investment and Industrial on September 14, 2024 and sell it today you would lose (40,000) from holding Investment and Industrial or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AgriBank Securities JSC vs. Investment and Industrial
Performance |
| Timeline |
| AgriBank Securities JSC |
| Investment and Industrial |
AgriBank Securities and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AgriBank Securities and Investment
The main advantage of trading using opposite AgriBank Securities and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgriBank Securities position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.The idea behind AgriBank Securities JSC and Investment and Industrial 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.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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