Correlation Between Rigolleau and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Rigolleau and Agrometal SAI 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 Rigolleau and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rigolleau SA and Agrometal SAI, you can compare the effects of market volatilities on Rigolleau and Agrometal SAI 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 Rigolleau with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rigolleau and Agrometal SAI.
Diversification Opportunities for Rigolleau and Agrometal SAI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rigolleau and Agrometal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rigolleau SA and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and Rigolleau 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 Rigolleau SA are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Rigolleau i.e., Rigolleau and Agrometal SAI go up and down completely randomly.
Pair Corralation between Rigolleau and Agrometal SAI
Assuming the 90 days trading horizon Rigolleau is expected to generate 3.9 times less return on investment than Agrometal SAI. But when comparing it to its historical volatility, Rigolleau SA is 1.55 times less risky than Agrometal SAI. It trades about 0.04 of its potential returns per unit of risk. Agrometal SAI is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,420 in Agrometal SAI on September 25, 2024 and sell it today you would earn a total of 2,290 from holding Agrometal SAI or generate 42.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Rigolleau SA vs. Agrometal SAI
Performance |
| Timeline |
| Rigolleau SA |
| Agrometal SAI |
Rigolleau and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rigolleau and Agrometal SAI
The main advantage of trading using opposite Rigolleau and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rigolleau position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| Rigolleau vs. Agrometal SAI | Rigolleau vs. Compania de Transporte | Rigolleau vs. Transportadora de Gas | Rigolleau vs. United States Steel |
| Agrometal SAI vs. Compania de Transporte | Agrometal SAI vs. Transportadora de Gas | Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. United States Steel |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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