Correlation Between Clime Investment and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both Clime Investment and Nufarm Finance 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 Clime Investment and Nufarm Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clime Investment Management and Nufarm Finance NZ, you can compare the effects of market volatilities on Clime Investment and Nufarm Finance 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 Clime Investment with a short position of Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and Nufarm Finance.
Diversification Opportunities for Clime Investment and Nufarm Finance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Clime and Nufarm is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ and Clime Investment 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 Clime Investment Management are associated (or correlated) with Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of Clime Investment i.e., Clime Investment and Nufarm Finance go up and down completely randomly.
Pair Corralation between Clime Investment and Nufarm Finance
Assuming the 90 days trading horizon Clime Investment Management is expected to generate 2.71 times more return on investment than Nufarm Finance. However, Clime Investment is 2.71 times more volatile than Nufarm Finance NZ. It trades about 0.12 of its potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.07 per unit of risk. If you would invest 35.00 in Clime Investment Management on December 2, 2024 and sell it today you would earn a total of 5.00 from holding Clime Investment Management or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Clime Investment Management vs. Nufarm Finance NZ
Performance |
Timeline |
Clime Investment Man |
Nufarm Finance NZ |
Clime Investment and Nufarm Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Clime Investment and Nufarm Finance
The main advantage of trading using opposite Clime Investment and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance's long position.Clime Investment vs. Aeon Metals | Clime Investment vs. Maggie Beer Holdings | Clime Investment vs. Oneview Healthcare PLC | Clime Investment vs. Centuria Industrial Reit |
Nufarm Finance vs. Sky Metals | Nufarm Finance vs. Bisalloy Steel Group | Nufarm Finance vs. Bluescope Steel | Nufarm Finance vs. Nex Metals Explorations |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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