Correlation Between Applied Digital and ToysRUs ANZ
Can any of the company-specific risk be diversified away by investing in both Applied Digital and ToysRUs ANZ 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 Applied Digital and ToysRUs ANZ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Digital and ToysRUs ANZ Limited, you can compare the effects of market volatilities on Applied Digital and ToysRUs ANZ 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 Applied Digital with a short position of ToysRUs ANZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Digital and ToysRUs ANZ.
Diversification Opportunities for Applied Digital and ToysRUs ANZ
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and ToysRUs is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Applied Digital and ToysRUs ANZ Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ToysRUs ANZ Limited and Applied Digital 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 Applied Digital are associated (or correlated) with ToysRUs ANZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ToysRUs ANZ Limited has no effect on the direction of Applied Digital i.e., Applied Digital and ToysRUs ANZ go up and down completely randomly.
Pair Corralation between Applied Digital and ToysRUs ANZ
Given the investment horizon of 90 days Applied Digital is expected to generate 0.87 times more return on investment than ToysRUs ANZ. However, Applied Digital is 1.15 times less risky than ToysRUs ANZ. It trades about 0.19 of its potential returns per unit of risk. ToysRUs ANZ Limited is currently generating about -0.26 per unit of risk. If you would invest 648.00 in Applied Digital on November 28, 2024 and sell it today you would earn a total of 163.00 from holding Applied Digital or generate 25.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Applied Digital vs. ToysRUs ANZ Limited
Performance |
| Timeline |
| Applied Digital |
| ToysRUs ANZ Limited |
Applied Digital and ToysRUs ANZ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Digital and ToysRUs ANZ
The main advantage of trading using opposite Applied Digital and ToysRUs ANZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Digital position performs unexpectedly, ToysRUs ANZ 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 ToysRUs ANZ will offset losses from the drop in ToysRUs ANZ's long position.| Applied Digital vs. Magic Empire Global | Applied Digital vs. Zhong Yang Financial | Applied Digital vs. Netcapital | Applied Digital vs. Lazard |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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