Correlation Between Nufarm Finance and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance and AiMedia Technologies 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 AiMedia Technologies 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 AiMedia Technologies, you can compare the effects of market volatilities on Nufarm Finance and AiMedia Technologies 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 AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and AiMedia Technologies.
Diversification Opportunities for Nufarm Finance and AiMedia Technologies
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nufarm and AiMedia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies 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 AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Nufarm Finance i.e., Nufarm Finance and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Nufarm Finance and AiMedia Technologies
Assuming the 90 days trading horizon Nufarm Finance is expected to generate 7.34 times less return on investment than AiMedia Technologies. But when comparing it to its historical volatility, Nufarm Finance NZ is 5.53 times less risky than AiMedia Technologies. It trades about 0.05 of its potential returns per unit of risk. AiMedia Technologies is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 33.00 in AiMedia Technologies on September 14, 2024 and sell it today you would earn a total of 52.00 from holding AiMedia Technologies or generate 157.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. AiMedia Technologies
Performance |
| Timeline |
| Nufarm Finance NZ |
| AiMedia Technologies |
Nufarm Finance and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and AiMedia Technologies
The main advantage of trading using opposite Nufarm Finance and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Nufarm Finance vs. Australian Unity Office | Nufarm Finance vs. Leeuwin Metals | Nufarm Finance vs. Catalyst Metals | Nufarm Finance vs. Group 6 Metals |
| AiMedia Technologies vs. Patriot Battery Metals | AiMedia Technologies vs. Nufarm Finance NZ | AiMedia Technologies vs. Group 6 Metals | AiMedia Technologies vs. Catalyst Metals |
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 CEOs Directory module to screen CEOs from public companies around the world.
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