Correlation Between Australian Agricultural and ABO GROUP
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and ABO GROUP 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 ABO GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and ABO GROUP ENVIRONMENT, you can compare the effects of market volatilities on Australian Agricultural and ABO GROUP 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 ABO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and ABO GROUP.
Diversification Opportunities for Australian Agricultural and ABO GROUP
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and ABO is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and ABO GROUP ENVIRONMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABO GROUP ENVIRONMENT 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 ABO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABO GROUP ENVIRONMENT has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and ABO GROUP go up and down completely randomly.
Pair Corralation between Australian Agricultural and ABO GROUP
Assuming the 90 days horizon Australian Agricultural is expected to under-perform the ABO GROUP. But the stock apears to be less risky and, when comparing its historical volatility, Australian Agricultural is 1.09 times less risky than ABO GROUP. The stock trades about -0.02 of its potential returns per unit of risk. The ABO GROUP ENVIRONMENT is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 541.00 in ABO GROUP ENVIRONMENT on September 20, 2024 and sell it today you would lose (59.00) from holding ABO GROUP ENVIRONMENT or give up 10.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. ABO GROUP ENVIRONMENT
Performance |
| Timeline |
| Australian Agricultural |
| ABO GROUP ENVIRONMENT |
Australian Agricultural and ABO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and ABO GROUP
The main advantage of trading using opposite Australian Agricultural and ABO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, ABO GROUP 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 ABO GROUP will offset losses from the drop in ABO GROUP's long position.| Australian Agricultural vs. MCEWEN MINING INC | Australian Agricultural vs. CEOTRONICS | Australian Agricultural vs. Cleanaway Waste Management | Australian Agricultural vs. Corporate Travel Management |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |