Correlation Between ONWARD MEDICAL and AUST AGRICULTURAL

Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL 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 ONWARD MEDICAL and AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ONWARD MEDICAL BV and AUST AGRICULTURAL, you can compare the effects of market volatilities on ONWARD MEDICAL 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 ONWARD MEDICAL with a short position of AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and AUST AGRICULTURAL.

Diversification Opportunities for ONWARD MEDICAL and AUST AGRICULTURAL

0.38

Correlation Coefficient

ONWARD MEDICAL  AUST AGRICULTURAL

Weak diversification

The 3 months correlation between ONWARD and AUST is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL and ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and AUST AGRICULTURAL go up and down completely randomly.

Pair Corralation between ONWARD MEDICAL and AUST AGRICULTURAL

Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 3.13 times more return on investment than AUST AGRICULTURAL. However, ONWARD MEDICAL is 3.13 times more volatile than AUST AGRICULTURAL. It trades about 0.02 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about -0.03 per unit of risk. If you would invest  596.00  in ONWARD MEDICAL BV on September 26, 2024 and sell it today you would lose (72.00) from holding ONWARD MEDICAL BV or give up 12.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ONWARD MEDICAL BV  vs.  AUST AGRICULTURAL

ONWARD MEDICAL BV

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ONWARD MEDICAL BV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ONWARD MEDICAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

AUST AGRICULTURAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AUST AGRICULTURAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AUST AGRICULTURAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ONWARD MEDICAL and AUST AGRICULTURAL

The main advantage of trading using opposite ONWARD MEDICAL and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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.

The idea behind ONWARD MEDICAL BV and AUST AGRICULTURAL 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.