Correlation Between Nufarm and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both Nufarm and ADRIATIC METALS 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 ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Limited and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on Nufarm and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm and ADRIATIC METALS.
Diversification Opportunities for Nufarm and ADRIATIC METALS
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nufarm and ADRIATIC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Limited and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 Limited are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of Nufarm i.e., Nufarm and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between Nufarm and ADRIATIC METALS
Assuming the 90 days horizon Nufarm Limited is expected to under-perform the ADRIATIC METALS. But the stock apears to be less risky and, when comparing its historical volatility, Nufarm Limited is 2.06 times less risky than ADRIATIC METALS. The stock trades about -0.06 of its potential returns per unit of risk. The ADRIATIC METALS LS 013355 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 242.00 in ADRIATIC METALS LS 013355 on August 31, 2024 and sell it today you would earn a total of 4.00 from holding ADRIATIC METALS LS 013355 or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Nufarm Limited vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| Nufarm Limited |
| ADRIATIC METALS LS |
Nufarm and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nufarm and ADRIATIC METALS
The main advantage of trading using opposite Nufarm and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| Nufarm vs. FANDIFI TECHNOLOGY P | Nufarm vs. Major Drilling Group | Nufarm vs. Nordic Semiconductor ASA | Nufarm vs. PRECISION DRILLING P |
| ADRIATIC METALS vs. Rio Tinto Group | ADRIATIC METALS vs. Liontown Resources Limited | ADRIATIC METALS vs. American Lithium Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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