Correlation Between Minor International and Agripure Holdings
Can any of the company-specific risk be diversified away by investing in both Minor International and Agripure Holdings 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 Minor International and Agripure Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International Public and Agripure Holdings Public, you can compare the effects of market volatilities on Minor International and Agripure Holdings 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 Minor International with a short position of Agripure Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and Agripure Holdings.
Diversification Opportunities for Minor International and Agripure Holdings
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Minor and Agripure is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and Agripure Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripure Holdings Public and Minor International 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 Minor International Public are associated (or correlated) with Agripure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripure Holdings Public has no effect on the direction of Minor International i.e., Minor International and Agripure Holdings go up and down completely randomly.
Pair Corralation between Minor International and Agripure Holdings
Assuming the 90 days trading horizon Minor International Public is expected to generate 1.32 times more return on investment than Agripure Holdings. However, Minor International is 1.32 times more volatile than Agripure Holdings Public. It trades about 0.03 of its potential returns per unit of risk. Agripure Holdings Public is currently generating about -0.23 per unit of risk. If you would invest 2,700 in Minor International Public on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Minor International Public or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minor International Public vs. Agripure Holdings Public
Performance |
| Timeline |
| Minor International |
| Agripure Holdings Public |
Minor International and Agripure Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and Agripure Holdings
The main advantage of trading using opposite Minor International and Agripure Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International position performs unexpectedly, Agripure Holdings 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 Agripure Holdings will offset losses from the drop in Agripure Holdings' long position.| Minor International vs. CP ALL Public | Minor International vs. Bangkok Dusit Medical | Minor International vs. Airports of Thailand | Minor International vs. Kasikornbank Public |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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