Correlation Between AUSNUTRIA DAIRY and GAMING FAC

Can any of the company-specific risk be diversified away by investing in both AUSNUTRIA DAIRY and GAMING FAC 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 AUSNUTRIA DAIRY and GAMING FAC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AUSNUTRIA DAIRY and GAMING FAC SA, you can compare the effects of market volatilities on AUSNUTRIA DAIRY and GAMING FAC 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 AUSNUTRIA DAIRY with a short position of GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSNUTRIA DAIRY and GAMING FAC.

Diversification Opportunities for AUSNUTRIA DAIRY and GAMING FAC

0.54

Correlation Coefficient

AUSNUTRIA DAIRY  GAMING FAC

Very weak diversification

The 3 months correlation between AUSNUTRIA and GAMING is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY are associated (or correlated) with GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and GAMING FAC go up and down completely randomly.

Pair Corralation between AUSNUTRIA DAIRY and GAMING FAC

Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to generate 1.42 times less return on investment than GAMING FAC. In addition to that, AUSNUTRIA DAIRY is 1.44 times more volatile than GAMING FAC SA. It trades about 0.08 of its total potential returns per unit of risk. GAMING FAC SA is currently generating about 0.17 per unit of volatility. If you would invest  157.00  in GAMING FAC SA on October 21, 2024 and sell it today you would earn a total of  12.00  from holding GAMING FAC SA or generate 7.64% return on investment over 90 days.

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

AUSNUTRIA DAIRY  vs.  GAMING FAC SA

AUSNUTRIA DAIRY

Risk-Adjusted Performance

0 of 100

Very Weak

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

GAMING FAC SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMING FAC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GAMING FAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AUSNUTRIA DAIRY and GAMING FAC

The main advantage of trading using opposite AUSNUTRIA DAIRY and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSNUTRIA DAIRY position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.

The idea behind AUSNUTRIA DAIRY and GAMING FAC SA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.