Correlation Between Nufarm Finance and MetalsGrove Mining
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance and MetalsGrove Mining 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 MetalsGrove Mining 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 MetalsGrove Mining, you can compare the effects of market volatilities on Nufarm Finance and MetalsGrove Mining 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 MetalsGrove Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and MetalsGrove Mining.
Diversification Opportunities for Nufarm Finance and MetalsGrove Mining
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nufarm and MetalsGrove is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ and MetalsGrove Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetalsGrove Mining 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 MetalsGrove Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetalsGrove Mining has no effect on the direction of Nufarm Finance i.e., Nufarm Finance and MetalsGrove Mining go up and down completely randomly.
Pair Corralation between Nufarm Finance and MetalsGrove Mining
Assuming the 90 days trading horizon Nufarm Finance NZ is expected to generate 0.22 times more return on investment than MetalsGrove Mining. However, Nufarm Finance NZ is 4.47 times less risky than MetalsGrove Mining. It trades about 0.05 of its potential returns per unit of risk. MetalsGrove Mining is currently generating about -0.19 per unit of risk. If you would invest 9,079 in Nufarm Finance NZ on October 14, 2024 and sell it today you would earn a total of 221.00 from holding Nufarm Finance NZ or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. MetalsGrove Mining
Performance |
| Timeline |
| Nufarm Finance NZ |
| MetalsGrove Mining |
Nufarm Finance and MetalsGrove Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and MetalsGrove Mining
The main advantage of trading using opposite Nufarm Finance and MetalsGrove Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance position performs unexpectedly, MetalsGrove Mining 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 MetalsGrove Mining will offset losses from the drop in MetalsGrove Mining's long position.| Nufarm Finance vs. MFF Capital Investments | Nufarm Finance vs. Aussie Broadband | Nufarm Finance vs. Duxton Broadacre Farms | Nufarm Finance vs. Djerriwarrh Investments |
| MetalsGrove Mining vs. Aeon Metals | MetalsGrove Mining vs. Sky Metals | MetalsGrove Mining vs. Hudson Investment Group | MetalsGrove Mining vs. Flagship Investments |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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