Correlation Between GrainCorp and Clean Seas
Can any of the company-specific risk be diversified away by investing in both GrainCorp and Clean Seas 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 GrainCorp and Clean Seas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrainCorp Limited and Clean Seas Seafood, you can compare the effects of market volatilities on GrainCorp and Clean Seas 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 GrainCorp with a short position of Clean Seas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrainCorp and Clean Seas.
Diversification Opportunities for GrainCorp and Clean Seas
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GrainCorp and Clean is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GrainCorp Limited and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and GrainCorp 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 GrainCorp Limited are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of GrainCorp i.e., GrainCorp and Clean Seas go up and down completely randomly.
Pair Corralation between GrainCorp and Clean Seas
Assuming the 90 days horizon GrainCorp Limited is expected to generate 1.39 times more return on investment than Clean Seas. However, GrainCorp is 1.39 times more volatile than Clean Seas Seafood. It trades about -0.01 of its potential returns per unit of risk. Clean Seas Seafood is currently generating about -0.09 per unit of risk. If you would invest 593.00 in GrainCorp Limited on September 3, 2024 and sell it today you would lose (60.00) from holding GrainCorp Limited or give up 10.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrainCorp Limited vs. Clean Seas Seafood
Performance |
| Timeline |
| GrainCorp Limited |
| Clean Seas Seafood |
GrainCorp and Clean Seas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrainCorp and Clean Seas
The main advantage of trading using opposite GrainCorp and Clean Seas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrainCorp position performs unexpectedly, Clean Seas 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 Clean Seas will offset losses from the drop in Clean Seas' long position.| GrainCorp vs. Australian Agricultural | GrainCorp vs. Forafric Global PLC | GrainCorp vs. Forafric Global PLC |
| Clean Seas vs. Forafric Global PLC | Clean Seas vs. Forafric Global PLC | Clean Seas vs. GrainCorp Limited | Clean Seas vs. Australian Agricultural |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |