Correlation Between Nufarm and CAR GROUP
Can any of the company-specific risk be diversified away by investing in both Nufarm and CAR GROUP 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 and CAR GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm and CAR GROUP LIMITED, you can compare the effects of market volatilities on Nufarm and CAR GROUP 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 with a short position of CAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm and CAR GROUP.
Diversification Opportunities for Nufarm and CAR GROUP
Poor diversification
The 3 months correlation between Nufarm and CAR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm and CAR GROUP LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAR GROUP LIMITED and Nufarm 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 are associated (or correlated) with CAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAR GROUP LIMITED has no effect on the direction of Nufarm i.e., Nufarm and CAR GROUP go up and down completely randomly.
Pair Corralation between Nufarm and CAR GROUP
Assuming the 90 days trading horizon Nufarm is expected to under-perform the CAR GROUP. In addition to that, Nufarm is 1.18 times more volatile than CAR GROUP LIMITED. It trades about -0.03 of its total potential returns per unit of risk. CAR GROUP LIMITED is currently generating about 0.03 per unit of volatility. If you would invest 3,771 in CAR GROUP LIMITED on October 24, 2024 and sell it today you would earn a total of 98.00 from holding CAR GROUP LIMITED or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nufarm vs. CAR GROUP LIMITED
Performance |
| Timeline |
| Nufarm |
| CAR GROUP LIMITED |
Nufarm and CAR GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm and CAR GROUP
The main advantage of trading using opposite Nufarm and CAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm position performs unexpectedly, CAR GROUP 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 CAR GROUP will offset losses from the drop in CAR GROUP's long position.| Nufarm vs. Flagship Investments | Nufarm vs. Pinnacle Investment Management | Nufarm vs. Djerriwarrh Investments | Nufarm vs. BlackWall Property Funds |
| CAR GROUP vs. Hotel Property Investments | CAR GROUP vs. Dynamic Drill And | CAR GROUP vs. Gtn | CAR GROUP vs. Nufarm |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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