Correlation Between Deere and Ageagle Aerial
Can any of the company-specific risk be diversified away by investing in both Deere and Ageagle Aerial 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 Deere and Ageagle Aerial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deere Company and Ageagle Aerial Systems, you can compare the effects of market volatilities on Deere and Ageagle Aerial 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 Deere with a short position of Ageagle Aerial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deere and Ageagle Aerial.
Diversification Opportunities for Deere and Ageagle Aerial
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deere and Ageagle is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Deere Company and Ageagle Aerial Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ageagle Aerial Systems and Deere 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 Deere Company are associated (or correlated) with Ageagle Aerial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageagle Aerial Systems has no effect on the direction of Deere i.e., Deere and Ageagle Aerial go up and down completely randomly.
Pair Corralation between Deere and Ageagle Aerial
Allowing for the 90-day total investment horizon Deere is expected to generate 11.13 times less return on investment than Ageagle Aerial. But when comparing it to its historical volatility, Deere Company is 13.6 times less risky than Ageagle Aerial. It trades about 0.25 of its potential returns per unit of risk. Ageagle Aerial Systems is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 287.00 in Ageagle Aerial Systems on August 30, 2024 and sell it today you would earn a total of 325.00 from holding Ageagle Aerial Systems or generate 113.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deere Company vs. Ageagle Aerial Systems
Performance |
| Timeline |
| Deere Company |
| Ageagle Aerial Systems |
Deere and Ageagle Aerial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deere and Ageagle Aerial
The main advantage of trading using opposite Deere and Ageagle Aerial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deere position performs unexpectedly, Ageagle Aerial 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 Ageagle Aerial will offset losses from the drop in Ageagle Aerial's long position.The idea behind Deere Company and Ageagle Aerial Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ageagle Aerial vs. Ehang Holdings | Ageagle Aerial vs. Vislink Technologies | Ageagle Aerial vs. Foresight Autonomous Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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