Correlation Between Scotts Miracle and American Vanguard
Can any of the company-specific risk be diversified away by investing in both Scotts Miracle and American Vanguard 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 Scotts Miracle and American Vanguard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scotts Miracle Gro and American Vanguard, you can compare the effects of market volatilities on Scotts Miracle and American Vanguard 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 Scotts Miracle with a short position of American Vanguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotts Miracle and American Vanguard.
Diversification Opportunities for Scotts Miracle and American Vanguard
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scotts and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Scotts Miracle Gro and American Vanguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Vanguard and Scotts Miracle 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 Scotts Miracle Gro are associated (or correlated) with American Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Vanguard has no effect on the direction of Scotts Miracle i.e., Scotts Miracle and American Vanguard go up and down completely randomly.
Pair Corralation between Scotts Miracle and American Vanguard
Considering the 90-day investment horizon Scotts Miracle Gro is expected to generate 0.62 times more return on investment than American Vanguard. However, Scotts Miracle Gro is 1.62 times less risky than American Vanguard. It trades about 0.04 of its potential returns per unit of risk. American Vanguard is currently generating about -0.03 per unit of risk. If you would invest 5,620 in Scotts Miracle Gro on November 9, 2024 and sell it today you would earn a total of 1,197 from holding Scotts Miracle Gro or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scotts Miracle Gro vs. American Vanguard
Performance |
| Timeline |
| Scotts Miracle Gro |
| American Vanguard |
Scotts Miracle and American Vanguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scotts Miracle and American Vanguard
The main advantage of trading using opposite Scotts Miracle and American Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotts Miracle position performs unexpectedly, American Vanguard 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 American Vanguard will offset losses from the drop in American Vanguard's long position.| Scotts Miracle vs. Corteva | Scotts Miracle vs. CF Industries Holdings | Scotts Miracle vs. American Vanguard | Scotts Miracle vs. Intrepid Potash |
| American Vanguard vs. CF Industries Holdings | American Vanguard vs. The Mosaic | American Vanguard vs. CVR Partners LP | American Vanguard vs. ICL Israel Chemicals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |