Correlation Between Imugene and Australian Dairy
Can any of the company-specific risk be diversified away by investing in both Imugene and Australian Dairy 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 Imugene and Australian Dairy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imugene and Australian Dairy Farms, you can compare the effects of market volatilities on Imugene and Australian Dairy 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 Imugene with a short position of Australian Dairy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imugene and Australian Dairy.
Diversification Opportunities for Imugene and Australian Dairy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Imugene and Australian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Imugene and Australian Dairy Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Dairy Farms and Imugene 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 Imugene are associated (or correlated) with Australian Dairy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Dairy Farms has no effect on the direction of Imugene i.e., Imugene and Australian Dairy go up and down completely randomly.
Pair Corralation between Imugene and Australian Dairy
Assuming the 90 days trading horizon Imugene is expected to under-perform the Australian Dairy. But the stock apears to be less risky and, when comparing its historical volatility, Imugene is 1.11 times less risky than Australian Dairy. The stock trades about -0.24 of its potential returns per unit of risk. The Australian Dairy Farms is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2.10 in Australian Dairy Farms on August 27, 2024 and sell it today you would earn a total of 0.70 from holding Australian Dairy Farms or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imugene vs. Australian Dairy Farms
Performance |
| Timeline |
| Imugene |
| Australian Dairy Farms |
Imugene and Australian Dairy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imugene and Australian Dairy
The main advantage of trading using opposite Imugene and Australian Dairy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imugene position performs unexpectedly, Australian Dairy 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 Australian Dairy will offset losses from the drop in Australian Dairy's long position.| Imugene vs. Aneka Tambang Tbk | Imugene vs. Rio Tinto | Imugene vs. BHP Group Limited | Imugene vs. Block Inc |
| Australian Dairy vs. Aneka Tambang Tbk | Australian Dairy vs. Commonwealth Bank | Australian Dairy vs. Commonwealth Bank of | Australian Dairy vs. Australia and New |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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