Correlation Between Exchange Income and Ag Growth
Can any of the company-specific risk be diversified away by investing in both Exchange Income and Ag Growth 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 Exchange Income and Ag Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Income and Ag Growth International, you can compare the effects of market volatilities on Exchange Income and Ag Growth 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 Exchange Income with a short position of Ag Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Income and Ag Growth.
Diversification Opportunities for Exchange Income and Ag Growth
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exchange and AFN is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International and Exchange Income 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 Exchange Income are associated (or correlated) with Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of Exchange Income i.e., Exchange Income and Ag Growth go up and down completely randomly.
Pair Corralation between Exchange Income and Ag Growth
Assuming the 90 days trading horizon Exchange Income is expected to generate 1.53 times less return on investment than Ag Growth. But when comparing it to its historical volatility, Exchange Income is 2.45 times less risky than Ag Growth. It trades about 0.31 of its potential returns per unit of risk. Ag Growth International is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,869 in Ag Growth International on August 29, 2024 and sell it today you would earn a total of 329.00 from holding Ag Growth International or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Income vs. Ag Growth International
Performance |
| Timeline |
| Exchange Income |
| Ag Growth International |
Exchange Income and Ag Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Income and Ag Growth
The main advantage of trading using opposite Exchange Income and Ag Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Income position performs unexpectedly, Ag Growth 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 Ag Growth will offset losses from the drop in Ag Growth's long position.| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
| Ag Growth vs. Exchange Income | Ag Growth vs. Stella Jones | Ag Growth vs. Superior Plus Corp | Ag Growth vs. NFI Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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