Correlation Between Australian Agricultural and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and ANGI Homeservices 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 Australian Agricultural and ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and ANGI Homeservices, you can compare the effects of market volatilities on Australian Agricultural and ANGI Homeservices 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 Australian Agricultural with a short position of ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and ANGI Homeservices.
Diversification Opportunities for Australian Agricultural and ANGI Homeservices
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Australian and ANGI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices and Australian Agricultural 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 Australian Agricultural are associated (or correlated) with ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and ANGI Homeservices go up and down completely randomly.
Pair Corralation between Australian Agricultural and ANGI Homeservices
Assuming the 90 days horizon Australian Agricultural is expected to generate 0.55 times more return on investment than ANGI Homeservices. However, Australian Agricultural is 1.83 times less risky than ANGI Homeservices. It trades about -0.02 of its potential returns per unit of risk. ANGI Homeservices is currently generating about -0.02 per unit of risk. If you would invest 84.00 in Australian Agricultural on September 13, 2024 and sell it today you would lose (1.00) from holding Australian Agricultural or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. ANGI Homeservices
Performance |
| Timeline |
| Australian Agricultural |
| ANGI Homeservices |
Australian Agricultural and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and ANGI Homeservices
The main advantage of trading using opposite Australian Agricultural and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.| Australian Agricultural vs. Collins Foods Limited | Australian Agricultural vs. Harmony Gold Mining | Australian Agricultural vs. MCEWEN MINING INC | Australian Agricultural vs. Astral Foods Limited |
| ANGI Homeservices vs. Tianjin Capital Environmental | ANGI Homeservices vs. BLUESCOPE STEEL | ANGI Homeservices vs. AGRICULTBK HADR25 YC | ANGI Homeservices vs. Australian Agricultural |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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