Correlation Between AUST AGRICULTURAL and TYSNES SPAREBANK
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and TYSNES SPAREBANK 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 TYSNES SPAREBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and TYSNES SPAREBANK NK, you can compare the effects of market volatilities on AUST AGRICULTURAL and TYSNES SPAREBANK 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 TYSNES SPAREBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and TYSNES SPAREBANK.
Diversification Opportunities for AUST AGRICULTURAL and TYSNES SPAREBANK
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUST and TYSNES is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and TYSNES SPAREBANK NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TYSNES SPAREBANK 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 TYSNES SPAREBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TYSNES SPAREBANK has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and TYSNES SPAREBANK go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and TYSNES SPAREBANK
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 0.94 times more return on investment than TYSNES SPAREBANK. However, AUST AGRICULTURAL is 1.06 times less risky than TYSNES SPAREBANK. It trades about -0.01 of its potential returns per unit of risk. TYSNES SPAREBANK NK is currently generating about -0.04 per unit of risk. If you would invest 84.00 in AUST AGRICULTURAL on September 21, 2024 and sell it today you would lose (2.00) from holding AUST AGRICULTURAL or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. TYSNES SPAREBANK NK
Performance |
| Timeline |
| AUST AGRICULTURAL |
| TYSNES SPAREBANK |
AUST AGRICULTURAL and TYSNES SPAREBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and TYSNES SPAREBANK
The main advantage of trading using opposite AUST AGRICULTURAL and TYSNES SPAREBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, TYSNES SPAREBANK 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 TYSNES SPAREBANK will offset losses from the drop in TYSNES SPAREBANK's long position.The idea behind AUST AGRICULTURAL and TYSNES SPAREBANK NK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TYSNES SPAREBANK vs. Daito Trust Construction | TYSNES SPAREBANK vs. 24SEVENOFFICE GROUP AB | TYSNES SPAREBANK vs. AUST AGRICULTURAL | TYSNES SPAREBANK vs. AGRICULTBK HADR25 YC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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