Correlation Between Nufarm Finance and Ainsworth Game
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance and Ainsworth Game 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 Nufarm Finance and Ainsworth Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Finance NZ and Ainsworth Game Technology, you can compare the effects of market volatilities on Nufarm Finance and Ainsworth Game 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 Nufarm Finance with a short position of Ainsworth Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and Ainsworth Game.
Diversification Opportunities for Nufarm Finance and Ainsworth Game
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nufarm and Ainsworth is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ and Ainsworth Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainsworth Game Technology and Nufarm Finance 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 Nufarm Finance NZ are associated (or correlated) with Ainsworth Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainsworth Game Technology has no effect on the direction of Nufarm Finance i.e., Nufarm Finance and Ainsworth Game go up and down completely randomly.
Pair Corralation between Nufarm Finance and Ainsworth Game
Assuming the 90 days trading horizon Nufarm Finance NZ is expected to generate 0.22 times more return on investment than Ainsworth Game. However, Nufarm Finance NZ is 4.61 times less risky than Ainsworth Game. It trades about -0.05 of its potential returns per unit of risk. Ainsworth Game Technology is currently generating about -0.23 per unit of risk. If you would invest 9,380 in Nufarm Finance NZ on November 3, 2024 and sell it today you would lose (60.00) from holding Nufarm Finance NZ or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. Ainsworth Game Technology
Performance |
| Timeline |
| Nufarm Finance NZ |
| Ainsworth Game Technology |
Nufarm Finance and Ainsworth Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and Ainsworth Game
The main advantage of trading using opposite Nufarm Finance and Ainsworth Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance position performs unexpectedly, Ainsworth Game 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 Ainsworth Game will offset losses from the drop in Ainsworth Game's long position.| Nufarm Finance vs. Aneka Tambang Tbk | Nufarm Finance vs. BHP Group Limited | Nufarm Finance vs. Ecofibre | Nufarm Finance vs. iShares Global Healthcare |
| Ainsworth Game vs. Super Retail Group | Ainsworth Game vs. Dalaroo Metals | Ainsworth Game vs. Dug Technology | Ainsworth Game vs. Computershare |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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