Correlation Between AGRICULTBK HADR/25 and Liontown Resources
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR/25 and Liontown Resources 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 Liontown Resources 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 Liontown Resources Limited, you can compare the effects of market volatilities on AGRICULTBK HADR/25 and Liontown Resources 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 Liontown Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR/25 and Liontown Resources.
Diversification Opportunities for AGRICULTBK HADR/25 and Liontown Resources
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AGRICULTBK and Liontown is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and Liontown Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontown Resources 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 Liontown Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontown Resources has no effect on the direction of AGRICULTBK HADR/25 i.e., AGRICULTBK HADR/25 and Liontown Resources go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR/25 and Liontown Resources
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.26 times more return on investment than Liontown Resources. However, AGRICULTBK HADR25 YC is 3.79 times less risky than Liontown Resources. It trades about 0.06 of its potential returns per unit of risk. Liontown Resources Limited is currently generating about 0.01 per unit of risk. If you would invest 634.00 in AGRICULTBK HADR25 YC on September 2, 2024 and sell it today you would earn a total of 486.00 from holding AGRICULTBK HADR25 YC or generate 76.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.11% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. Liontown Resources Limited
Performance |
| Timeline |
| AGRICULTBK HADR/25 |
| Liontown Resources |
AGRICULTBK HADR/25 and Liontown Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR/25 and Liontown Resources
The main advantage of trading using opposite AGRICULTBK HADR/25 and Liontown Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR/25 position performs unexpectedly, Liontown Resources 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 Liontown Resources will offset losses from the drop in Liontown Resources' long position.| AGRICULTBK HADR/25 vs. CHINA BANK ADR20 | AGRICULTBK HADR/25 vs. COMMONWBK AUSTRSPADRS | AGRICULTBK HADR/25 vs. The Toronto Dominion Bank | AGRICULTBK HADR/25 vs. Bank of Montreal |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |