Correlation Between Duxton Broadacre and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Duxton Broadacre and AiMedia Technologies 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 Duxton Broadacre and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duxton Broadacre Farms and AiMedia Technologies, you can compare the effects of market volatilities on Duxton Broadacre and AiMedia Technologies 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 Duxton Broadacre with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duxton Broadacre and AiMedia Technologies.
Diversification Opportunities for Duxton Broadacre and AiMedia Technologies
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Duxton and AiMedia is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Duxton Broadacre Farms and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Duxton Broadacre 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 Duxton Broadacre Farms are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Duxton Broadacre i.e., Duxton Broadacre and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Duxton Broadacre and AiMedia Technologies
Assuming the 90 days trading horizon Duxton Broadacre Farms is expected to under-perform the AiMedia Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Duxton Broadacre Farms is 2.25 times less risky than AiMedia Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The AiMedia Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 86.00 in AiMedia Technologies on September 1, 2024 and sell it today you would lose (4.00) from holding AiMedia Technologies or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duxton Broadacre Farms vs. AiMedia Technologies
Performance |
| Timeline |
| Duxton Broadacre Farms |
| AiMedia Technologies |
Duxton Broadacre and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duxton Broadacre and AiMedia Technologies
The main advantage of trading using opposite Duxton Broadacre and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duxton Broadacre position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Duxton Broadacre vs. My Foodie Box | Duxton Broadacre vs. Toys R Us | Duxton Broadacre vs. Pinnacle Investment Management | Duxton Broadacre vs. Cleanaway Waste Management |
| AiMedia Technologies vs. iShares Global Healthcare | AiMedia Technologies vs. Australian Dairy Farms | AiMedia Technologies vs. Adriatic Metals Plc | AiMedia Technologies 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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