Correlation Between AUST AGRICULTURAL and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and Commercial Vehicle 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 Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and Commercial Vehicle Group, you can compare the effects of market volatilities on AUST AGRICULTURAL and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and Commercial Vehicle.
Diversification Opportunities for AUST AGRICULTURAL and Commercial Vehicle
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between AUST and Commercial is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and Commercial Vehicle go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and Commercial Vehicle
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 0.34 times more return on investment than Commercial Vehicle. However, AUST AGRICULTURAL is 2.92 times less risky than Commercial Vehicle. It trades about 0.16 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.15 per unit of risk. If you would invest 83.00 in AUST AGRICULTURAL on November 28, 2024 and sell it today you would earn a total of 4.00 from holding AUST AGRICULTURAL or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. Commercial Vehicle Group
Performance |
| Timeline |
| AUST AGRICULTURAL |
| Commercial Vehicle |
AUST AGRICULTURAL and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and Commercial Vehicle
The main advantage of trading using opposite AUST AGRICULTURAL and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| AUST AGRICULTURAL vs. CVR Medical Corp | AUST AGRICULTURAL vs. Medical Properties Trust | AUST AGRICULTURAL vs. Addtech AB | AUST AGRICULTURAL vs. MeVis Medical Solutions |
| Commercial Vehicle vs. Sunny Optical Technology | Commercial Vehicle vs. Alfa Financial Software | Commercial Vehicle vs. Check Point Software | Commercial Vehicle vs. Casio Computer CoLtd |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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