Correlation Between AUST AGRICULTURAL and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and DATAGROUP 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 DATAGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and DATAGROUP SE, you can compare the effects of market volatilities on AUST AGRICULTURAL and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and DATAGROUP.
Diversification Opportunities for AUST AGRICULTURAL and DATAGROUP
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AUST and DATAGROUP is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and DATAGROUP go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and DATAGROUP
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to under-perform the DATAGROUP. But the stock apears to be less risky and, when comparing its historical volatility, AUST AGRICULTURAL is 1.19 times less risky than DATAGROUP. The stock trades about -0.02 of its potential returns per unit of risk. The DATAGROUP SE is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,274 in DATAGROUP SE on September 2, 2024 and sell it today you would lose (1,704) from holding DATAGROUP SE or give up 27.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. DATAGROUP SE
Performance |
| Timeline |
| AUST AGRICULTURAL |
| DATAGROUP SE |
AUST AGRICULTURAL and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and DATAGROUP
The main advantage of trading using opposite AUST AGRICULTURAL and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| AUST AGRICULTURAL vs. SIVERS SEMICONDUCTORS AB | AUST AGRICULTURAL vs. Darden Restaurants | AUST AGRICULTURAL vs. Reliance Steel Aluminum | AUST AGRICULTURAL vs. Q2M Managementberatung AG |
| DATAGROUP vs. Superior Plus Corp | DATAGROUP vs. NMI Holdings | DATAGROUP vs. Origin Agritech | DATAGROUP vs. SIVERS SEMICONDUCTORS AB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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