Correlation Between Australian Agricultural and Performance Food
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and Performance 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 Performance 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 Performance Food Group, you can compare the effects of market volatilities on Australian Agricultural and Performance 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and Performance Food.
Diversification Opportunities for Australian Agricultural and Performance Food
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Australian and Performance is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and Performance Food go up and down completely randomly.
Pair Corralation between Australian Agricultural and Performance Food
Assuming the 90 days horizon Australian Agricultural is expected to generate 27.65 times less return on investment than Performance Food. But when comparing it to its historical volatility, Australian Agricultural is 1.2 times less risky than Performance Food. It trades about 0.01 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7,400 in Performance Food Group on September 3, 2024 and sell it today you would earn a total of 850.00 from holding Performance Food Group or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. Performance Food Group
Performance |
| Timeline |
| Australian Agricultural |
| Performance Food |
Australian Agricultural and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and Performance Food
The main advantage of trading using opposite Australian Agricultural and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, Performance 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 Performance Food will offset losses from the drop in Performance Food's long position.| Australian Agricultural vs. Archer Daniels Midland | Australian Agricultural vs. Tyson Foods | Australian Agricultural vs. Wilmar International Limited | Australian Agricultural vs. SalMar ASA |
| Performance Food vs. Australian Agricultural | Performance Food vs. Sumitomo Mitsui Construction | Performance Food vs. Iridium Communications | Performance Food vs. Entravision Communications |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |