Correlation Between Australian Agricultural and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and NTG Nordic 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 NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and NTG Nordic Transport, you can compare the effects of market volatilities on Australian Agricultural and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and NTG Nordic.
Diversification Opportunities for Australian Agricultural and NTG Nordic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Australian and NTG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and NTG Nordic go up and down completely randomly.
Pair Corralation between Australian Agricultural and NTG Nordic
Assuming the 90 days horizon Australian Agricultural is expected to generate 0.84 times more return on investment than NTG Nordic. However, Australian Agricultural is 1.2 times less risky than NTG Nordic. It trades about 0.01 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.02 per unit of risk. If you would invest 82.00 in Australian Agricultural on September 24, 2024 and sell it today you would earn a total of 1.00 from holding Australian Agricultural or generate 1.22% 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. NTG Nordic Transport
Performance |
| Timeline |
| Australian Agricultural |
| NTG Nordic Transport |
Australian Agricultural and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and NTG Nordic
The main advantage of trading using opposite Australian Agricultural and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's 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 |
| NTG Nordic vs. MITSUBISHI STEEL MFG | NTG Nordic vs. ABO GROUP ENVIRONMENT | NTG Nordic vs. Khiron Life Sciences | NTG Nordic vs. United States Steel |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |