Correlation Between Information Services and Ag Growth
Can any of the company-specific risk be diversified away by investing in both Information Services 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 Information Services and Ag Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services and Ag Growth International, you can compare the effects of market volatilities on Information Services 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 Information Services with a short position of Ag Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Ag Growth.
Diversification Opportunities for Information Services and Ag Growth
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Information and AFN is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Information Services 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 Information Services 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 Information Services 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 Information Services i.e., Information Services and Ag Growth go up and down completely randomly.
Pair Corralation between Information Services and Ag Growth
Assuming the 90 days trading horizon Information Services is expected to generate 1.11 times less return on investment than Ag Growth. But when comparing it to its historical volatility, Information Services is 1.18 times less risky than Ag Growth. It trades about 0.03 of its potential returns per unit of risk. Ag Growth International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,305 in Ag Growth International on August 28, 2024 and sell it today you would earn a total of 1,036 from holding Ag Growth International or generate 24.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services vs. Ag Growth International
Performance |
| Timeline |
| Information Services |
| Ag Growth International |
Information Services and Ag Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Ag Growth
The main advantage of trading using opposite Information Services and Ag Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services 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.| Information Services vs. Pollard Banknote Limited | Information Services vs. K Bro Linen | Information Services vs. Calian Technologies | Information Services vs. Evertz Technologies Limited |
| Ag Growth vs. Exchange Income | Ag Growth vs. Stella Jones | Ag Growth vs. Superior Plus Corp | Ag Growth vs. NFI Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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