Correlation Between AUST AGRICULTURAL and Apple
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and Apple Inc, you can compare the effects of market volatilities on AUST AGRICULTURAL and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and Apple.
Diversification Opportunities for AUST AGRICULTURAL and Apple
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AUST and Apple is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and Apple go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and Apple
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to under-perform the Apple. But the stock apears to be less risky and, when comparing its historical volatility, AUST AGRICULTURAL is 1.08 times less risky than Apple. The stock trades about -0.27 of its potential returns per unit of risk. The Apple Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 23,500 in Apple Inc on October 12, 2024 and sell it today you would earn a total of 50.00 from holding Apple Inc or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. Apple Inc
Performance |
| Timeline |
| AUST AGRICULTURAL |
| Apple Inc |
AUST AGRICULTURAL and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and Apple
The main advantage of trading using opposite AUST AGRICULTURAL and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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