Correlation Between TOTAL GABON and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON and AUST AGRICULTURAL 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 TOTAL GABON and AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and AUST AGRICULTURAL, you can compare the effects of market volatilities on TOTAL GABON and AUST AGRICULTURAL 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 TOTAL GABON with a short position of AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and AUST AGRICULTURAL.
Diversification Opportunities for TOTAL GABON and AUST AGRICULTURAL
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TOTAL and AUST is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL and TOTAL GABON 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 TOTAL GABON are associated (or correlated) with AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of TOTAL GABON i.e., TOTAL GABON and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between TOTAL GABON and AUST AGRICULTURAL
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 4.23 times more return on investment than AUST AGRICULTURAL. However, TOTAL GABON is 4.23 times more volatile than AUST AGRICULTURAL. It trades about 0.2 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.06 per unit of risk. If you would invest 15,800 in TOTAL GABON on September 5, 2024 and sell it today you would earn a total of 2,850 from holding TOTAL GABON or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
TOTAL GABON vs. AUST AGRICULTURAL
Performance |
| Timeline |
| TOTAL GABON |
| AUST AGRICULTURAL |
TOTAL GABON and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and AUST AGRICULTURAL
The main advantage of trading using opposite TOTAL GABON and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| TOTAL GABON vs. ELMOS SEMICONDUCTOR | TOTAL GABON vs. Flutter Entertainment PLC | TOTAL GABON vs. REMEDY ENTERTAINMENT OYJ | TOTAL GABON vs. Universal Entertainment |
| AUST AGRICULTURAL vs. The Hanover Insurance | AUST AGRICULTURAL vs. SLR Investment Corp | AUST AGRICULTURAL vs. Apollo Investment Corp | AUST AGRICULTURAL vs. PennyMac Mortgage Investment |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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