Correlation Between AUSNUTRIA DAIRY and Afentra PLC

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

By analyzing existing cross correlation between AUSNUTRIA DAIRY and Afentra PLC, you can compare the effects of market volatilities on AUSNUTRIA DAIRY and Afentra PLC 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 Afentra PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSNUTRIA DAIRY and Afentra PLC.

Diversification Opportunities for AUSNUTRIA DAIRY and Afentra PLC

-0.3

Correlation Coefficient

AUSNUTRIA DAIRY  Afentra PLC

Very good diversification

The 3 months correlation between AUSNUTRIA and Afentra is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding AUSNUTRIA DAIRY and Afentra PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afentra PLC 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 Afentra PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afentra PLC has no effect on the direction of AUSNUTRIA DAIRY i.e., AUSNUTRIA DAIRY and Afentra PLC go up and down completely randomly.

Pair Corralation between AUSNUTRIA DAIRY and Afentra PLC

Assuming the 90 days trading horizon AUSNUTRIA DAIRY is expected to under-perform the Afentra PLC. In addition to that, AUSNUTRIA DAIRY is 1.18 times more volatile than Afentra PLC. It trades about -0.03 of its total potential returns per unit of risk. Afentra PLC is currently generating about -0.01 per unit of volatility. If you would invest  53.00  in Afentra PLC on December 1, 2024 and sell it today you would lose (2.00) from holding Afentra PLC or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

AUSNUTRIA DAIRY  vs.  Afentra PLC

AUSNUTRIA DAIRY

Risk-Adjusted Performance

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.

Afentra PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Afentra PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Afentra PLC 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 Afentra PLC

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

The idea behind AUSNUTRIA DAIRY and Afentra PLC 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.