Correlation Between Australian Agricultural and JD HEALTH
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and JD HEALTH 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 JD HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and JD HEALTH INTL, you can compare the effects of market volatilities on Australian Agricultural and JD HEALTH 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 JD HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and JD HEALTH.
Diversification Opportunities for Australian Agricultural and JD HEALTH
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and 8ZN is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and JD HEALTH INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD HEALTH INTL 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 JD HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD HEALTH INTL has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and JD HEALTH go up and down completely randomly.
Pair Corralation between Australian Agricultural and JD HEALTH
Assuming the 90 days horizon Australian Agricultural is expected to generate 3.87 times less return on investment than JD HEALTH. But when comparing it to its historical volatility, Australian Agricultural is 1.43 times less risky than JD HEALTH. It trades about 0.04 of its potential returns per unit of risk. JD HEALTH INTL is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 322.00 in JD HEALTH INTL on September 2, 2024 and sell it today you would earn a total of 18.00 from holding JD HEALTH INTL or generate 5.59% 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. JD HEALTH INTL
Performance |
| Timeline |
| Australian Agricultural |
| JD HEALTH INTL |
Australian Agricultural and JD HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and JD HEALTH
The main advantage of trading using opposite Australian Agricultural and JD HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, JD HEALTH 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 JD HEALTH will offset losses from the drop in JD HEALTH's long position.| Australian Agricultural vs. SalMar ASA | Australian Agricultural vs. Superior Plus Corp | Australian Agricultural vs. NMI Holdings | Australian Agricultural vs. Origin Agritech |
| JD HEALTH vs. Fresenius SE Co | JD HEALTH vs. Fresenius Medical Care | JD HEALTH vs. Sonic Healthcare Limited | JD HEALTH vs. Option Care Health |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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