Correlation Between Kip McGrath and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Kip McGrath and Nufarm Finance 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 Kip McGrath and Nufarm Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kip McGrath Education and Nufarm Finance NZ, you can compare the effects of market volatilities on Kip McGrath and Nufarm Finance 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 Kip McGrath with a short position of Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kip McGrath and Nufarm Finance.
Diversification Opportunities for Kip McGrath and Nufarm Finance
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kip and Nufarm is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kip McGrath Education and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ and Kip McGrath 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 Kip McGrath Education are associated (or correlated) with Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of Kip McGrath i.e., Kip McGrath and Nufarm Finance go up and down completely randomly.
Pair Corralation between Kip McGrath and Nufarm Finance
Assuming the 90 days trading horizon Kip McGrath Education is expected to under-perform the Nufarm Finance. In addition to that, Kip McGrath is 1.71 times more volatile than Nufarm Finance NZ. It trades about -0.06 of its total potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.04 per unit of volatility. If you would invest 9,140 in Nufarm Finance NZ on October 26, 2024 and sell it today you would earn a total of 120.00 from holding Nufarm Finance NZ or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kip McGrath Education vs. Nufarm Finance NZ
Performance |
| Timeline |
| Kip McGrath Education |
| Nufarm Finance NZ |
Kip McGrath and Nufarm Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kip McGrath and Nufarm Finance
The main advantage of trading using opposite Kip McGrath and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kip McGrath position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance's long position.| Kip McGrath vs. Hutchison Telecommunications | Kip McGrath vs. Australian Unity Office | Kip McGrath vs. Homeco Daily Needs | Kip McGrath vs. Hudson Investment Group |
| Nufarm Finance vs. Viva Leisure | Nufarm Finance vs. Aristocrat Leisure | Nufarm Finance vs. EMvision Medical Devices | Nufarm Finance vs. Southern Cross Media |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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