Correlation Between AGRICULTBK HADR/25 and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR/25 and ALEFARM BREWING 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 AGRICULTBK HADR/25 and ALEFARM BREWING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and ALEFARM BREWING DK 05, you can compare the effects of market volatilities on AGRICULTBK HADR/25 and ALEFARM BREWING 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 AGRICULTBK HADR/25 with a short position of ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR/25 and ALEFARM BREWING.
Diversification Opportunities for AGRICULTBK HADR/25 and ALEFARM BREWING
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICULTBK and ALEFARM is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK and AGRICULTBK HADR/25 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 AGRICULTBK HADR25 YC are associated (or correlated) with ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of AGRICULTBK HADR/25 i.e., AGRICULTBK HADR/25 and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR/25 and ALEFARM BREWING
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.51 times more return on investment than ALEFARM BREWING. However, AGRICULTBK HADR25 YC is 1.98 times less risky than ALEFARM BREWING. It trades about 0.08 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about 0.01 per unit of risk. If you would invest 678.00 in AGRICULTBK HADR25 YC on December 27, 2024 and sell it today you would earn a total of 762.00 from holding AGRICULTBK HADR25 YC or generate 112.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. ALEFARM BREWING DK 05
Performance |
| Timeline |
| AGRICULTBK HADR/25 |
| ALEFARM BREWING DK |
AGRICULTBK HADR/25 and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR/25 and ALEFARM BREWING
The main advantage of trading using opposite AGRICULTBK HADR/25 and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR/25 position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.| AGRICULTBK HADR/25 vs. 24SEVENOFFICE GROUP AB | AGRICULTBK HADR/25 vs. Autohome ADR | AGRICULTBK HADR/25 vs. ANGI Homeservices | AGRICULTBK HADR/25 vs. INVITATION HOMES DL |
| ALEFARM BREWING vs. USWE SPORTS AB | ALEFARM BREWING vs. Cognizant Technology Solutions | ALEFARM BREWING vs. SCIENCE IN SPORT | ALEFARM BREWING vs. Easy Software AG |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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