Correlation Between AUST AGRICULTURAL and ImagineAR
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and ImagineAR 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 ImagineAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and ImagineAR, you can compare the effects of market volatilities on AUST AGRICULTURAL and ImagineAR 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 ImagineAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and ImagineAR.
Diversification Opportunities for AUST AGRICULTURAL and ImagineAR
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUST and ImagineAR is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and ImagineAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImagineAR 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 ImagineAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImagineAR has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and ImagineAR go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and ImagineAR
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 58.12 times less return on investment than ImagineAR. But when comparing it to its historical volatility, AUST AGRICULTURAL is 7.82 times less risky than ImagineAR. It trades about 0.01 of its potential returns per unit of risk. ImagineAR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.30 in ImagineAR on October 26, 2024 and sell it today you would earn a total of 2.55 from holding ImagineAR or generate 110.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. ImagineAR
Performance |
| Timeline |
| AUST AGRICULTURAL |
| ImagineAR |
AUST AGRICULTURAL and ImagineAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and ImagineAR
The main advantage of trading using opposite AUST AGRICULTURAL and ImagineAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, ImagineAR 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 ImagineAR will offset losses from the drop in ImagineAR's long position.| AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc | AUST AGRICULTURAL vs. Apple Inc |
| ImagineAR vs. Titan Machinery | ImagineAR vs. ELL ENVIRONHLDGS HD 0001 | ImagineAR vs. MOUNT GIBSON IRON | ImagineAR vs. AUST AGRICULTURAL |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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