Correlation Between AGRICUL BK and Safran SA
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK and Safran SA 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 AGRICUL BK and Safran SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and Safran SA, you can compare the effects of market volatilities on AGRICUL BK and Safran SA 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 AGRICUL BK with a short position of Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Safran SA.
Diversification Opportunities for AGRICUL BK and Safran SA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICUL and Safran is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA and AGRICUL BK 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 AGRICUL BK CHINA H are associated (or correlated) with Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Safran SA go up and down completely randomly.
Pair Corralation between AGRICUL BK and Safran SA
Assuming the 90 days trading horizon AGRICUL BK is expected to generate 9.54 times less return on investment than Safran SA. In addition to that, AGRICUL BK is 1.4 times more volatile than Safran SA. It trades about 0.01 of its total potential returns per unit of risk. Safran SA is currently generating about 0.13 per unit of volatility. If you would invest 21,070 in Safran SA on August 25, 2024 and sell it today you would earn a total of 840.00 from holding Safran SA or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. Safran SA
Performance |
| Timeline |
| AGRICUL BK CHINA |
| Safran SA |
AGRICUL BK and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Safran SA
The main advantage of trading using opposite AGRICUL BK and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK position performs unexpectedly, Safran SA 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 Safran SA will offset losses from the drop in Safran SA's long position.| AGRICUL BK vs. Strategic Investments AS | AGRICUL BK vs. Apollo Investment Corp | AGRICUL BK vs. REGAL ASIAN INVESTMENTS | AGRICUL BK vs. HK Electric Investments |
| Safran SA vs. GRIFFIN MINING LTD | Safran SA vs. Coeur Mining | Safran SA vs. ECHO INVESTMENT ZY | Safran SA vs. Geely Automobile 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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