Correlation Between AgriBank FCB and Nelnet

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

By analyzing existing cross correlation between AgriBank FCB and Nelnet Inc, you can compare the effects of market volatilities on AgriBank FCB and Nelnet 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 AgriBank FCB with a short position of Nelnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriBank FCB and Nelnet.

Diversification Opportunities for AgriBank FCB and Nelnet

0.0

Correlation Coefficient

AgriBank FCB  Nelnet

Pay attention - limited upside

The 3 months correlation between AgriBank and Nelnet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AgriBank FCB and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc and AgriBank FCB 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 AgriBank FCB are associated (or correlated) with Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of AgriBank FCB i.e., AgriBank FCB and Nelnet go up and down completely randomly.

Pair Corralation between AgriBank FCB and Nelnet

If you would invest  10,050  in AgriBank FCB on September 12, 2024 and sell it today you would earn a total of  0.00  from holding AgriBank FCB or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

AgriBank FCB  vs.  Nelnet Inc

AgriBank FCB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgriBank FCB has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, AgriBank FCB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Nelnet Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nelnet Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nelnet is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with AgriBank FCB and Nelnet

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

The idea behind AgriBank FCB and Nelnet Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.