Correlation Between ABACUS STORAGE and Duxton Broadacre
Can any of the company-specific risk be diversified away by investing in both ABACUS STORAGE and Duxton Broadacre 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 ABACUS STORAGE and Duxton Broadacre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABACUS STORAGE KING and Duxton Broadacre Farms, you can compare the effects of market volatilities on ABACUS STORAGE and Duxton Broadacre 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 ABACUS STORAGE with a short position of Duxton Broadacre. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABACUS STORAGE and Duxton Broadacre.
Diversification Opportunities for ABACUS STORAGE and Duxton Broadacre
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABACUS and Duxton is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ABACUS STORAGE KING and Duxton Broadacre Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duxton Broadacre Farms and ABACUS STORAGE 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 ABACUS STORAGE KING are associated (or correlated) with Duxton Broadacre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duxton Broadacre Farms has no effect on the direction of ABACUS STORAGE i.e., ABACUS STORAGE and Duxton Broadacre go up and down completely randomly.
Pair Corralation between ABACUS STORAGE and Duxton Broadacre
Assuming the 90 days trading horizon ABACUS STORAGE KING is expected to generate 0.59 times more return on investment than Duxton Broadacre. However, ABACUS STORAGE KING is 1.69 times less risky than Duxton Broadacre. It trades about -0.03 of its potential returns per unit of risk. Duxton Broadacre Farms is currently generating about -0.03 per unit of risk. If you would invest 122.00 in ABACUS STORAGE KING on September 4, 2024 and sell it today you would lose (1.00) from holding ABACUS STORAGE KING or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABACUS STORAGE KING vs. Duxton Broadacre Farms
Performance |
| Timeline |
| ABACUS STORAGE KING |
| Duxton Broadacre Farms |
ABACUS STORAGE and Duxton Broadacre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABACUS STORAGE and Duxton Broadacre
The main advantage of trading using opposite ABACUS STORAGE and Duxton Broadacre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABACUS STORAGE position performs unexpectedly, Duxton Broadacre 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 Duxton Broadacre will offset losses from the drop in Duxton Broadacre's long position.| ABACUS STORAGE vs. Westpac Banking | ABACUS STORAGE vs. Odyssey Energy | ABACUS STORAGE vs. Bisalloy Steel Group | ABACUS STORAGE vs. Fortescue |
| Duxton Broadacre vs. Premier Investments | Duxton Broadacre vs. Argo Investments | Duxton Broadacre vs. MFF Capital Investments | Duxton Broadacre vs. COAST ENTERTAINMENT HOLDINGS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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