Correlation Between Pollard Banknote and Ag Growth
Can any of the company-specific risk be diversified away by investing in both Pollard Banknote and Ag Growth 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 Pollard Banknote and Ag Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pollard Banknote Limited and Ag Growth International, you can compare the effects of market volatilities on Pollard Banknote and Ag Growth 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 Pollard Banknote with a short position of Ag Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pollard Banknote and Ag Growth.
Diversification Opportunities for Pollard Banknote and Ag Growth
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pollard and AFN is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pollard Banknote Limited and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International and Pollard Banknote 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 Pollard Banknote Limited are associated (or correlated) with Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of Pollard Banknote i.e., Pollard Banknote and Ag Growth go up and down completely randomly.
Pair Corralation between Pollard Banknote and Ag Growth
Assuming the 90 days trading horizon Pollard Banknote Limited is expected to generate 0.84 times more return on investment than Ag Growth. However, Pollard Banknote Limited is 1.19 times less risky than Ag Growth. It trades about 0.21 of its potential returns per unit of risk. Ag Growth International is currently generating about -0.35 per unit of risk. If you would invest 2,420 in Pollard Banknote Limited on November 7, 2024 and sell it today you would earn a total of 331.00 from holding Pollard Banknote Limited or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pollard Banknote Limited vs. Ag Growth International
Performance |
| Timeline |
| Pollard Banknote |
| Ag Growth International |
Pollard Banknote and Ag Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pollard Banknote and Ag Growth
The main advantage of trading using opposite Pollard Banknote and Ag Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pollard Banknote position performs unexpectedly, Ag Growth 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 Ag Growth will offset losses from the drop in Ag Growth's long position.| Pollard Banknote vs. TFI International | Pollard Banknote vs. Baylin Technologies | Pollard Banknote vs. Information Services |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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