Correlation Between Australian Agricultural and FOX P
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and FOX P 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 FOX P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and FOX P B, you can compare the effects of market volatilities on Australian Agricultural and FOX P 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 FOX P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and FOX P.
Diversification Opportunities for Australian Agricultural and FOX P
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Australian and FOX is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and FOX P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOX P B 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 FOX P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOX P B has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and FOX P go up and down completely randomly.
Pair Corralation between Australian Agricultural and FOX P
Assuming the 90 days horizon Australian Agricultural is expected to under-perform the FOX P. In addition to that, Australian Agricultural is 1.03 times more volatile than FOX P B. It trades about -0.02 of its total potential returns per unit of risk. FOX P B is currently generating about 0.11 per unit of volatility. If you would invest 3,920 in FOX P B on September 13, 2024 and sell it today you would earn a total of 180.00 from holding FOX P B or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. FOX P B
Performance |
| Timeline |
| Australian Agricultural |
| FOX P B |
Australian Agricultural and FOX P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and FOX P
The main advantage of trading using opposite Australian Agricultural and FOX P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, FOX P 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 FOX P will offset losses from the drop in FOX P's long position.| Australian Agricultural vs. Collins Foods Limited | Australian Agricultural vs. Harmony Gold Mining | Australian Agricultural vs. MCEWEN MINING INC | Australian Agricultural vs. Astral Foods Limited |
| FOX P vs. Universal Insurance Holdings | FOX P vs. HANOVER INSURANCE | FOX P vs. DICKS Sporting Goods | FOX P vs. LIFENET INSURANCE CO |
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.
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