Correlation Between AUST AGRICULTURAL and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and WIMFARM SA 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 AUST AGRICULTURAL and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and WIMFARM SA EO, you can compare the effects of market volatilities on AUST AGRICULTURAL and WIMFARM SA 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 AUST AGRICULTURAL with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and WIMFARM SA.
Diversification Opportunities for AUST AGRICULTURAL and WIMFARM SA
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AUST and WIMFARM is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and AUST 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 AUST AGRICULTURAL are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and WIMFARM SA go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and WIMFARM SA
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 0.33 times more return on investment than WIMFARM SA. However, AUST AGRICULTURAL is 3.02 times less risky than WIMFARM SA. It trades about 0.0 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.01 per unit of risk. If you would invest 88.00 in AUST AGRICULTURAL on December 12, 2024 and sell it today you would lose (3.00) from holding AUST AGRICULTURAL or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. WIMFARM SA EO
Performance |
| Timeline |
| AUST AGRICULTURAL |
| WIMFARM SA EO |
AUST AGRICULTURAL and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and WIMFARM SA
The main advantage of trading using opposite AUST AGRICULTURAL and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| AUST AGRICULTURAL vs. PPHE HOTEL GROUP | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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