Correlation Between Step One and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Step One 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 Step One and Nufarm Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and Nufarm Finance NZ, you can compare the effects of market volatilities on Step One 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 Step One with a short position of Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Nufarm Finance.
Diversification Opportunities for Step One and Nufarm Finance
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Step and Nufarm is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing 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 Step One 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 Step One Clothing 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 Step One i.e., Step One and Nufarm Finance go up and down completely randomly.
Pair Corralation between Step One and Nufarm Finance
Assuming the 90 days trading horizon Step One Clothing is expected to generate 6.63 times more return on investment than Nufarm Finance. However, Step One is 6.63 times more volatile than Nufarm Finance NZ. It trades about 0.1 of its potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.06 per unit of risk. If you would invest 27.00 in Step One Clothing on August 31, 2024 and sell it today you would earn a total of 118.00 from holding Step One Clothing or generate 437.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Step One Clothing vs. Nufarm Finance NZ
Performance |
| Timeline |
| Step One Clothing |
| Nufarm Finance NZ |
Step One and Nufarm Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Step One and Nufarm Finance
The main advantage of trading using opposite Step One and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One 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.| Step One vs. Aneka Tambang Tbk | Step One vs. Unibail Rodamco Westfield SE | Step One vs. Macquarie Group | Step One vs. Commonwealth Bank |
| Nufarm Finance vs. Ecofibre | Nufarm Finance vs. iShares Global Healthcare | Nufarm Finance vs. Ridley | Nufarm Finance vs. Australian Dairy Farms |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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