Correlation Between AUST AGRICULTURAL and Klöckner
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and Klöckner 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 Klöckner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and Klckner Co SE, you can compare the effects of market volatilities on AUST AGRICULTURAL and Klöckner 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 Klöckner. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and Klöckner.
Diversification Opportunities for AUST AGRICULTURAL and Klöckner
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUST and Klöckner is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co 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 Klöckner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and Klöckner go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and Klöckner
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 0.9 times more return on investment than Klöckner. However, AUST AGRICULTURAL is 1.11 times less risky than Klöckner. It trades about -0.02 of its potential returns per unit of risk. Klckner Co SE is currently generating about -0.05 per unit of risk. If you would invest 111.00 in AUST AGRICULTURAL on September 2, 2024 and sell it today you would lose (28.00) from holding AUST AGRICULTURAL or give up 25.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. Klckner Co SE
Performance |
| Timeline |
| AUST AGRICULTURAL |
| Klckner Co SE |
AUST AGRICULTURAL and Klöckner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and Klöckner
The main advantage of trading using opposite AUST AGRICULTURAL and Klöckner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, Klöckner 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 Klöckner will offset losses from the drop in Klöckner'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 |
| Klöckner vs. AUST AGRICULTURAL | Klöckner vs. Granite Construction | Klöckner vs. Monster Beverage Corp | Klöckner vs. Australian 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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