Correlation Between AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4, you can compare the effects of market volatilities on AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/.
Diversification Opportunities for AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUST and PROSIEBENSAT1 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSIEBENSAT1 MEDIADR4/ has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/ go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 0.51 times more return on investment than PROSIEBENSAT1 MEDIADR4/. However, AUST AGRICULTURAL is 1.96 times less risky than PROSIEBENSAT1 MEDIADR4/. It trades about -0.03 of its potential returns per unit of risk. PROSIEBENSAT1 MEDIADR4 is currently generating about -0.02 per unit of risk. If you would invest 111.00 in AUST AGRICULTURAL on September 19, 2024 and sell it today you would lose (30.00) from holding AUST AGRICULTURAL or give up 27.03% 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. PROSIEBENSAT1 MEDIADR4
Performance |
| Timeline |
| AUST AGRICULTURAL |
| PROSIEBENSAT1 MEDIADR4/ |
AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/
The main advantage of trading using opposite AUST AGRICULTURAL and PROSIEBENSAT1 MEDIADR4/ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, PROSIEBENSAT1 MEDIADR4/ 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 PROSIEBENSAT1 MEDIADR4/ will offset losses from the drop in PROSIEBENSAT1 MEDIADR4/'s long position.| AUST AGRICULTURAL vs. PROSIEBENSAT1 MEDIADR4 | AUST AGRICULTURAL vs. Playtech plc | AUST AGRICULTURAL vs. LG Display Co | AUST AGRICULTURAL vs. Tencent Music Entertainment |
| PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc | PROSIEBENSAT1 MEDIADR4/ vs. Apple Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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