Correlation Between Australian Agricultural and GWILLI FOOD
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and GWILLI FOOD 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 GWILLI FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and GWILLI FOOD, you can compare the effects of market volatilities on Australian Agricultural and GWILLI FOOD 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 GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and GWILLI FOOD.
Diversification Opportunities for Australian Agricultural and GWILLI FOOD
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Australian and GWILLI is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI FOOD 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 GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and GWILLI FOOD go up and down completely randomly.
Pair Corralation between Australian Agricultural and GWILLI FOOD
Assuming the 90 days horizon Australian Agricultural is expected to generate 0.62 times more return on investment than GWILLI FOOD. However, Australian Agricultural is 1.6 times less risky than GWILLI FOOD. It trades about 0.0 of its potential returns per unit of risk. GWILLI FOOD is currently generating about -0.01 per unit of risk. If you would invest 82.00 in Australian Agricultural on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Australian Agricultural or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. GWILLI FOOD
Performance |
| Timeline |
| Australian Agricultural |
| GWILLI FOOD |
Australian Agricultural and GWILLI FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and GWILLI FOOD
The main advantage of trading using opposite Australian Agricultural and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, GWILLI FOOD 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 GWILLI FOOD will offset losses from the drop in GWILLI FOOD's long position.| Australian Agricultural vs. Archer Daniels Midland | Australian Agricultural vs. Tyson Foods | Australian Agricultural vs. MOWI ASA SPADR | Australian Agricultural vs. Mowi ASA |
| GWILLI FOOD vs. Titan Machinery | GWILLI FOOD vs. Australian Agricultural | GWILLI FOOD vs. Penta Ocean Construction Co | GWILLI FOOD vs. Major Drilling Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |