Correlation Between Industrial Investment and AGI Greenpac
Can any of the company-specific risk be diversified away by investing in both Industrial Investment and AGI Greenpac 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 Industrial Investment and AGI Greenpac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Investment Trust and AGI Greenpac Limited, you can compare the effects of market volatilities on Industrial Investment and AGI Greenpac 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 Industrial Investment with a short position of AGI Greenpac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Investment and AGI Greenpac.
Diversification Opportunities for Industrial Investment and AGI Greenpac
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Industrial and AGI is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Investment Trust and AGI Greenpac Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGI Greenpac Limited and Industrial Investment 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 Industrial Investment Trust are associated (or correlated) with AGI Greenpac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGI Greenpac Limited has no effect on the direction of Industrial Investment i.e., Industrial Investment and AGI Greenpac go up and down completely randomly.
Pair Corralation between Industrial Investment and AGI Greenpac
Assuming the 90 days trading horizon Industrial Investment is expected to generate 7.33 times less return on investment than AGI Greenpac. But when comparing it to its historical volatility, Industrial Investment Trust is 1.22 times less risky than AGI Greenpac. It trades about 0.06 of its potential returns per unit of risk. AGI Greenpac Limited is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 95,475 in AGI Greenpac Limited on September 12, 2024 and sell it today you would earn a total of 26,895 from holding AGI Greenpac Limited or generate 28.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Investment Trust vs. AGI Greenpac Limited
Performance |
| Timeline |
| Industrial Investment |
| AGI Greenpac Limited |
Industrial Investment and AGI Greenpac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Investment and AGI Greenpac
The main advantage of trading using opposite Industrial Investment and AGI Greenpac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Investment position performs unexpectedly, AGI Greenpac 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 AGI Greenpac will offset losses from the drop in AGI Greenpac's long position.| Industrial Investment vs. Yes Bank Limited | Industrial Investment vs. Indian Oil | Industrial Investment vs. Indo Borax Chemicals | Industrial Investment vs. Kingfa Science Technology |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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