Correlation Between AGRICULTBK HADR25 and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on AGRICULTBK HADR25 and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and SCOTT TECHNOLOGY.
Diversification Opportunities for AGRICULTBK HADR25 and SCOTT TECHNOLOGY
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AGRICULTBK and SCOTT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR25 and SCOTT TECHNOLOGY
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.8 times more return on investment than SCOTT TECHNOLOGY. However, AGRICULTBK HADR25 YC is 1.24 times less risky than SCOTT TECHNOLOGY. It trades about 0.16 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.05 per unit of risk. If you would invest 949.00 in AGRICULTBK HADR25 YC on October 18, 2024 and sell it today you would earn a total of 311.00 from holding AGRICULTBK HADR25 YC or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. SCOTT TECHNOLOGY
Performance |
| Timeline |
| AGRICULTBK HADR25 |
| SCOTT TECHNOLOGY |
AGRICULTBK HADR25 and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR25 and SCOTT TECHNOLOGY
The main advantage of trading using opposite AGRICULTBK HADR25 and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| AGRICULTBK HADR25 vs. Burlington Stores | AGRICULTBK HADR25 vs. COSTCO WHOLESALE CDR | AGRICULTBK HADR25 vs. FAST RETAIL ADR | AGRICULTBK HADR25 vs. UNIVMUSIC GRPADR050 |
| SCOTT TECHNOLOGY vs. AGRICULTBK HADR25 YC | SCOTT TECHNOLOGY vs. MAVEN WIRELESS SWEDEN | SCOTT TECHNOLOGY vs. Dairy Farm International | SCOTT TECHNOLOGY vs. FARM 51 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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