Correlation Between DEERE and Old Republic
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By analyzing existing cross correlation between DEERE CO and Old Republic International, you can compare the effects of market volatilities on DEERE and Old Republic 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 DEERE with a short position of Old Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of DEERE and Old Republic.
Diversification Opportunities for DEERE and Old Republic
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DEERE and Old is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding DEERE CO and Old Republic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Republic Interna and DEERE 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 DEERE CO are associated (or correlated) with Old Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Republic Interna has no effect on the direction of DEERE i.e., DEERE and Old Republic go up and down completely randomly.
Pair Corralation between DEERE and Old Republic
Assuming the 90 days trading horizon DEERE CO is expected to generate 40.07 times more return on investment than Old Republic. However, DEERE is 40.07 times more volatile than Old Republic International. It trades about 0.04 of its potential returns per unit of risk. Old Republic International is currently generating about 0.1 per unit of risk. If you would invest 9,114 in DEERE CO on September 2, 2024 and sell it today you would lose (1,186) from holding DEERE CO or give up 13.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.31% |
| Values | Daily Returns |
DEERE CO vs. Old Republic International
Performance |
| Timeline |
| DEERE CO |
| Old Republic Interna |
DEERE and Old Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DEERE and Old Republic
The main advantage of trading using opposite DEERE and Old Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DEERE position performs unexpectedly, Old Republic 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 Old Republic will offset losses from the drop in Old Republic's long position.The idea behind DEERE CO and Old Republic International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Old Republic vs. Axa Equitable Holdings | Old Republic vs. American International Group | Old Republic vs. Arch Capital Group | Old Republic vs. Sun Life Financial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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