Correlation Between STRAYER EDUCATION and Nufarm
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and Nufarm 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 STRAYER EDUCATION and Nufarm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Nufarm Limited, you can compare the effects of market volatilities on STRAYER EDUCATION and Nufarm 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 STRAYER EDUCATION with a short position of Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Nufarm.
Diversification Opportunities for STRAYER EDUCATION and Nufarm
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between STRAYER and Nufarm is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Limited and STRAYER EDUCATION 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 STRAYER EDUCATION are associated (or correlated) with Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Nufarm go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Nufarm
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to under-perform the Nufarm. But the stock apears to be less risky and, when comparing its historical volatility, STRAYER EDUCATION is 1.01 times less risky than Nufarm. The stock trades about -0.15 of its potential returns per unit of risk. The Nufarm Limited is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Nufarm Limited on October 12, 2024 and sell it today you would lose (8.00) from holding Nufarm Limited or give up 3.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Nufarm Limited
Performance |
| Timeline |
| STRAYER EDUCATION |
| Nufarm Limited |
STRAYER EDUCATION and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Nufarm
The main advantage of trading using opposite STRAYER EDUCATION and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, Nufarm 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 will offset losses from the drop in Nufarm's long position.| STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc |
| Nufarm vs. STRAYER EDUCATION | Nufarm vs. DeVry Education Group | Nufarm vs. CHRYSALIS INVESTMENTS LTD | Nufarm vs. SEI INVESTMENTS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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