Correlation Between American Premium and Ag Growth
Can any of the company-specific risk be diversified away by investing in both American Premium and Ag Growth 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 American Premium and Ag Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Premium Water and Ag Growth International, you can compare the effects of market volatilities on American Premium and Ag Growth 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 American Premium with a short position of Ag Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Premium and Ag Growth.
Diversification Opportunities for American Premium and Ag Growth
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and AGGZF is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding American Premium Water and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International and American Premium 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 American Premium Water are associated (or correlated) with Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of American Premium i.e., American Premium and Ag Growth go up and down completely randomly.
Pair Corralation between American Premium and Ag Growth
Given the investment horizon of 90 days American Premium Water is expected to generate 147.24 times more return on investment than Ag Growth. However, American Premium is 147.24 times more volatile than Ag Growth International. It trades about 0.29 of its potential returns per unit of risk. Ag Growth International is currently generating about 0.21 per unit of risk. If you would invest 0.00 in American Premium Water on August 30, 2024 and sell it today you would earn a total of 0.01 from holding American Premium Water or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Premium Water vs. Ag Growth International
Performance |
| Timeline |
| American Premium Water |
| Ag Growth International |
American Premium and Ag Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Premium and Ag Growth
The main advantage of trading using opposite American Premium and Ag Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Premium position performs unexpectedly, Ag Growth 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 Ag Growth will offset losses from the drop in Ag Growth's long position.| American Premium vs. SPENN Technology AS | American Premium vs. OFX Group Ltd | American Premium vs. Cypherpunk Holdings | American Premium vs. Cathedra Bitcoin |
| Ag Growth vs. Deere Company | Ag Growth vs. Columbus McKinnon | Ag Growth vs. Hyster Yale Materials Handling | Ag Growth vs. Manitowoc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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