Correlation Between Nufarm Finance and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Nufarm Finance and Regis Healthcare 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 Regis Healthcare 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 Regis Healthcare, you can compare the effects of market volatilities on Nufarm Finance and Regis Healthcare 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 Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm Finance and Regis Healthcare.
Diversification Opportunities for Nufarm Finance and Regis Healthcare
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nufarm and Regis is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Finance NZ and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare 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 Regis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Healthcare has no effect on the direction of Nufarm Finance i.e., Nufarm Finance and Regis Healthcare go up and down completely randomly.
Pair Corralation between Nufarm Finance and Regis Healthcare
Assuming the 90 days trading horizon Nufarm Finance NZ is expected to generate 0.3 times more return on investment than Regis Healthcare. However, Nufarm Finance NZ is 3.37 times less risky than Regis Healthcare. It trades about 0.19 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.04 per unit of risk. If you would invest 9,026 in Nufarm Finance NZ on August 30, 2024 and sell it today you would earn a total of 214.00 from holding Nufarm Finance NZ or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm Finance NZ vs. Regis Healthcare
Performance |
| Timeline |
| Nufarm Finance NZ |
| Regis Healthcare |
Nufarm Finance and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm Finance and Regis Healthcare
The main advantage of trading using opposite Nufarm Finance and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm Finance position performs unexpectedly, Regis Healthcare 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 Regis Healthcare will offset losses from the drop in Regis Healthcare's long position.| Nufarm Finance vs. Champion Iron | Nufarm Finance vs. Ridley | Nufarm Finance vs. Australian Dairy Farms | Nufarm Finance vs. Perpetual Credit Income |
| Regis Healthcare vs. Cochlear | Regis Healthcare vs. Rea Group | Regis Healthcare vs. CSL | Regis Healthcare vs. Macquarie Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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