Correlation Between Australian Agricultural and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and PLAYMATES TOYS 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 PLAYMATES TOYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and PLAYMATES TOYS, you can compare the effects of market volatilities on Australian Agricultural and PLAYMATES TOYS 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 PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and PLAYMATES TOYS.
Diversification Opportunities for Australian Agricultural and PLAYMATES TOYS
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and PLAYMATES is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS 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 PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between Australian Agricultural and PLAYMATES TOYS
Assuming the 90 days horizon Australian Agricultural is expected to under-perform the PLAYMATES TOYS. But the stock apears to be less risky and, when comparing its historical volatility, Australian Agricultural is 2.96 times less risky than PLAYMATES TOYS. The stock trades about -0.02 of its potential returns per unit of risk. The PLAYMATES TOYS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1.43 in PLAYMATES TOYS on October 13, 2024 and sell it today you would earn a total of 5.17 from holding PLAYMATES TOYS or generate 361.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Australian Agricultural vs. PLAYMATES TOYS
Performance |
| Timeline |
| Australian Agricultural |
| PLAYMATES TOYS |
Australian Agricultural and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and PLAYMATES TOYS
The main advantage of trading using opposite Australian Agricultural and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| Australian Agricultural vs. Genertec Universal Medical | Australian Agricultural vs. TELECOM ITALIA | Australian Agricultural vs. GLOBUS MEDICAL A | Australian Agricultural vs. Cairo Communication SpA |
| PLAYMATES TOYS vs. Titan Machinery | PLAYMATES TOYS vs. Australian Agricultural | PLAYMATES TOYS vs. LANDSEA GREEN MANAGEMENT | PLAYMATES TOYS vs. Federal Agricultural Mortgage |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |