Correlation Between Australian Agricultural and International Game
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and International Game 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 International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and International Game Technology, you can compare the effects of market volatilities on Australian Agricultural and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and International Game.
Diversification Opportunities for Australian Agricultural and International Game
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Australian and International is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and International Game go up and down completely randomly.
Pair Corralation between Australian Agricultural and International Game
Assuming the 90 days horizon Australian Agricultural is expected to generate 0.51 times more return on investment than International Game. However, Australian Agricultural is 1.96 times less risky than International Game. It trades about -0.13 of its potential returns per unit of risk. International Game Technology is currently generating about -0.18 per unit of risk. If you would invest 83.00 in Australian Agricultural on October 11, 2024 and sell it today you would lose (2.00) from holding Australian Agricultural or give up 2.41% 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. International Game Technology
Performance |
| Timeline |
| Australian Agricultural |
| International Game |
Australian Agricultural and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and International Game
The main advantage of trading using opposite Australian Agricultural and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game's long position.| Australian Agricultural vs. Singapore Reinsurance | Australian Agricultural vs. VIENNA INSURANCE GR | Australian Agricultural vs. KENEDIX OFFICE INV | Australian Agricultural vs. CENTURIA OFFICE REIT |
| International Game vs. AGRICULTBK HADR25 YC | International Game vs. Australian Agricultural | International Game vs. YATRA ONLINE DL 0001 | International Game vs. NorAm Drilling AS |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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