Correlation Between Rand Mining and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Rand Mining and Nufarm Finance 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 Rand Mining and Nufarm Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rand Mining and Nufarm Finance NZ, you can compare the effects of market volatilities on Rand Mining and Nufarm Finance 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 Rand Mining with a short position of Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rand Mining and Nufarm Finance.
Diversification Opportunities for Rand Mining and Nufarm Finance
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rand and Nufarm is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Rand Mining and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ and Rand Mining 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 Rand Mining are associated (or correlated) with Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of Rand Mining i.e., Rand Mining and Nufarm Finance go up and down completely randomly.
Pair Corralation between Rand Mining and Nufarm Finance
Assuming the 90 days trading horizon Rand Mining is expected to generate 5.07 times more return on investment than Nufarm Finance. However, Rand Mining is 5.07 times more volatile than Nufarm Finance NZ. It trades about 0.16 of its potential returns per unit of risk. Nufarm Finance NZ is currently generating about -0.05 per unit of risk. If you would invest 145.00 in Rand Mining on November 3, 2024 and sell it today you would earn a total of 13.00 from holding Rand Mining or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rand Mining vs. Nufarm Finance NZ
Performance |
| Timeline |
| Rand Mining |
| Nufarm Finance NZ |
Rand Mining and Nufarm Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rand Mining and Nufarm Finance
The main advantage of trading using opposite Rand Mining and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rand Mining position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance's long position.| Rand Mining vs. Land Homes Group | Rand Mining vs. Gold Road Resources | Rand Mining vs. Saferoads Holdings | Rand Mining vs. Dalaroo Metals |
| Nufarm Finance vs. Southern Cross Media | Nufarm Finance vs. COAST ENTERTAINMENT HOLDINGS | Nufarm Finance vs. Dalaroo Metals | Nufarm Finance vs. Centrex Metals |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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