Correlation Between Nufarm and Gtn
Can any of the company-specific risk be diversified away by investing in both Nufarm and Gtn 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 Gtn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm and Gtn, you can compare the effects of market volatilities on Nufarm and Gtn 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 Gtn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm and Gtn.
Diversification Opportunities for Nufarm and Gtn
Excellent diversification
The 3 months correlation between Nufarm and Gtn is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm and Gtn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtn 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 Gtn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gtn has no effect on the direction of Nufarm i.e., Nufarm and Gtn go up and down completely randomly.
Pair Corralation between Nufarm and Gtn
Assuming the 90 days trading horizon Nufarm is expected to generate 1.49 times more return on investment than Gtn. However, Nufarm is 1.49 times more volatile than Gtn. It trades about 0.05 of its potential returns per unit of risk. Gtn is currently generating about -0.06 per unit of risk. If you would invest 380.00 in Nufarm on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Nufarm or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nufarm vs. Gtn
Performance |
| Timeline |
| Nufarm |
| Gtn |
Nufarm and Gtn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm and Gtn
The main advantage of trading using opposite Nufarm and Gtn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm position performs unexpectedly, Gtn 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 Gtn will offset losses from the drop in Gtn's long position.| Nufarm vs. BKI Investment | Nufarm vs. Sandon Capital Investments | Nufarm vs. Diversified United Investment | Nufarm vs. ACDC Metals |
| Gtn vs. Medical Developments International | Gtn vs. Argo Investments | Gtn vs. Regal Investment | Gtn vs. Hotel Property 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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