Correlation Between Australian Agricultural and Siamgas
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and Siamgas 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 Siamgas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and Siamgas And Petrochemicals, you can compare the effects of market volatilities on Australian Agricultural and Siamgas 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 Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and Siamgas.
Diversification Opportunities for Australian Agricultural and Siamgas
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and Siamgas is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche 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 Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and Siamgas go up and down completely randomly.
Pair Corralation between Australian Agricultural and Siamgas
Assuming the 90 days horizon Australian Agricultural is expected to under-perform the Siamgas. But the stock apears to be less risky and, when comparing its historical volatility, Australian Agricultural is 1.76 times less risky than Siamgas. The stock trades about -0.01 of its potential returns per unit of risk. The Siamgas And Petrochemicals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Siamgas And Petrochemicals on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Siamgas And Petrochemicals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. Siamgas And Petrochemicals
Performance |
| Timeline |
| Australian Agricultural |
| Siamgas And Petroche |
Australian Agricultural and Siamgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and Siamgas
The main advantage of trading using opposite Australian Agricultural and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.| Australian Agricultural vs. Archer Daniels Midland | Australian Agricultural vs. Tyson Foods | Australian Agricultural vs. Wilmar International Limited | Australian Agricultural vs. MOWI ASA SPADR |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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