Correlation Between Nufarm Finance and Dug Technology
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance and Dug Technology 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 Dug Technology 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 Dug Technology, you can compare the effects of market volatilities on Nufarm Finance and Dug Technology 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 Dug Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and Dug Technology.
Diversification Opportunities for Nufarm Finance and Dug Technology
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nufarm and Dug is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug 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 Dug Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology has no effect on the direction of Nufarm Finance i.e., Nufarm Finance and Dug Technology go up and down completely randomly.
Pair Corralation between Nufarm Finance and Dug Technology
Assuming the 90 days trading horizon Nufarm Finance NZ is expected to generate 0.14 times more return on investment than Dug Technology. However, Nufarm Finance NZ is 6.93 times less risky than Dug Technology. It trades about 0.27 of its potential returns per unit of risk. Dug Technology is currently generating about -0.08 per unit of risk. If you would invest 9,041 in Nufarm Finance NZ on September 3, 2024 and sell it today you would earn a total of 309.00 from holding Nufarm Finance NZ or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. Dug Technology
Performance |
| Timeline |
| Nufarm Finance NZ |
| Dug Technology |
Nufarm Finance and Dug Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and Dug Technology
The main advantage of trading using opposite Nufarm Finance and Dug Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance position performs unexpectedly, Dug Technology 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 Dug Technology will offset losses from the drop in Dug Technology's long position.| Nufarm Finance vs. Champion Iron | Nufarm Finance vs. iShares Global Healthcare | Nufarm Finance vs. Peel Mining | Nufarm Finance vs. Australian Dairy Farms |
| Dug Technology vs. Commonwealth Bank | Dug Technology vs. Commonwealth Bank of | Dug Technology vs. Champion Iron | Dug Technology vs. iShares Global Healthcare |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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