Correlation Between Commercial Vehicle and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and AUST AGRICULTURAL 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 Commercial Vehicle and AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and AUST AGRICULTURAL, you can compare the effects of market volatilities on Commercial Vehicle and AUST AGRICULTURAL 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 Commercial Vehicle with a short position of AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and AUST AGRICULTURAL.
Diversification Opportunities for Commercial Vehicle and AUST AGRICULTURAL
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commercial and AUST is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between Commercial Vehicle and AUST AGRICULTURAL
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the AUST AGRICULTURAL. In addition to that, Commercial Vehicle is 2.92 times more volatile than AUST AGRICULTURAL. It trades about -0.15 of its total potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.16 per unit of volatility. If you would invest 83.00 in AUST AGRICULTURAL on November 28, 2024 and sell it today you would earn a total of 4.00 from holding AUST AGRICULTURAL or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. AUST AGRICULTURAL
Performance |
| Timeline |
| Commercial Vehicle |
| AUST AGRICULTURAL |
Commercial Vehicle and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and AUST AGRICULTURAL
The main advantage of trading using opposite Commercial Vehicle and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| Commercial Vehicle vs. Sunny Optical Technology | Commercial Vehicle vs. Alfa Financial Software | Commercial Vehicle vs. Check Point Software | Commercial Vehicle vs. Casio Computer CoLtd |
| AUST AGRICULTURAL vs. CVR Medical Corp | AUST AGRICULTURAL vs. Medical Properties Trust | AUST AGRICULTURAL vs. Addtech AB | AUST AGRICULTURAL vs. MeVis Medical Solutions |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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