Correlation Between AGRICULTBK HADR25 and FIRSTRAND
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 and FIRSTRAND 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 HADR25 and FIRSTRAND 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 FIRSTRAND, you can compare the effects of market volatilities on AGRICULTBK HADR25 and FIRSTRAND 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 HADR25 with a short position of FIRSTRAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and FIRSTRAND.
Diversification Opportunities for AGRICULTBK HADR25 and FIRSTRAND
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGRICULTBK and FIRSTRAND is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and FIRSTRAND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRSTRAND and AGRICULTBK HADR25 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 FIRSTRAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRSTRAND has no effect on the direction of AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and FIRSTRAND go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR25 and FIRSTRAND
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 1.22 times more return on investment than FIRSTRAND. However, AGRICULTBK HADR25 is 1.22 times more volatile than FIRSTRAND. It trades about 0.29 of its potential returns per unit of risk. FIRSTRAND is currently generating about 0.21 per unit of risk. If you would invest 1,120 in AGRICULTBK HADR25 YC on September 12, 2024 and sell it today you would earn a total of 110.00 from holding AGRICULTBK HADR25 YC or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. FIRSTRAND
Performance |
| Timeline |
| AGRICULTBK HADR25 |
| FIRSTRAND |
AGRICULTBK HADR25 and FIRSTRAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR25 and FIRSTRAND
The main advantage of trading using opposite AGRICULTBK HADR25 and FIRSTRAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 position performs unexpectedly, FIRSTRAND 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 FIRSTRAND will offset losses from the drop in FIRSTRAND's long position.| AGRICULTBK HADR25 vs. The Toronto Dominion Bank | AGRICULTBK HADR25 vs. Superior Plus Corp | AGRICULTBK HADR25 vs. SIVERS SEMICONDUCTORS AB | AGRICULTBK HADR25 vs. NorAm Drilling AS |
| FIRSTRAND vs. HYDROFARM HLD GRP | FIRSTRAND vs. Granite Construction | FIRSTRAND vs. AGRICULTBK HADR25 YC | FIRSTRAND vs. North American Construction |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |