Correlation Between Global Fashion and AGRICULTBK HADR/25
Can any of the company-specific risk be diversified away by investing in both Global Fashion and AGRICULTBK HADR/25 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 Global Fashion and AGRICULTBK HADR/25 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Fashion Group and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on Global Fashion and AGRICULTBK HADR/25 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 Global Fashion with a short position of AGRICULTBK HADR/25. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Fashion and AGRICULTBK HADR/25.
Diversification Opportunities for Global Fashion and AGRICULTBK HADR/25
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and AGRICULTBK is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Global Fashion Group and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR/25 and Global Fashion 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 Global Fashion Group are associated (or correlated) with AGRICULTBK HADR/25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR/25 has no effect on the direction of Global Fashion i.e., Global Fashion and AGRICULTBK HADR/25 go up and down completely randomly.
Pair Corralation between Global Fashion and AGRICULTBK HADR/25
Assuming the 90 days horizon Global Fashion Group is expected to generate 2.59 times more return on investment than AGRICULTBK HADR/25. However, Global Fashion is 2.59 times more volatile than AGRICULTBK HADR25 YC. It trades about 0.05 of its potential returns per unit of risk. AGRICULTBK HADR25 YC is currently generating about 0.07 per unit of risk. If you would invest 20.00 in Global Fashion Group on September 2, 2024 and sell it today you would earn a total of 3.00 from holding Global Fashion Group or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Fashion Group vs. AGRICULTBK HADR25 YC
Performance |
| Timeline |
| Global Fashion Group |
| AGRICULTBK HADR/25 |
Global Fashion and AGRICULTBK HADR/25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Fashion and AGRICULTBK HADR/25
The main advantage of trading using opposite Global Fashion and AGRICULTBK HADR/25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Fashion position performs unexpectedly, AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 will offset losses from the drop in AGRICULTBK HADR/25's long position.| Global Fashion vs. Marie Brizard Wine | Global Fashion vs. MTI WIRELESS EDGE | Global Fashion vs. BRIT AMER TOBACCO | Global Fashion vs. IMPERIAL TOBACCO |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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