Correlation Between Australian Oilseeds and Fresh Del

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

By analyzing existing cross correlation between Australian Oilseeds Holdings and Fresh Del Monte, you can compare the effects of market volatilities on Australian Oilseeds and Fresh Del 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 Australian Oilseeds with a short position of Fresh Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Oilseeds and Fresh Del.

Diversification Opportunities for Australian Oilseeds and Fresh Del

-0.63

Correlation Coefficient

Australian Oilseeds  Fresh Del

Excellent diversification

The 3 months correlation between Australian and Fresh is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Australian Oilseeds Holdings and Fresh Del Monte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Del Monte and Australian Oilseeds 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 Australian Oilseeds Holdings are associated (or correlated) with Fresh Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Del Monte has no effect on the direction of Australian Oilseeds i.e., Australian Oilseeds and Fresh Del go up and down completely randomly.

Pair Corralation between Australian Oilseeds and Fresh Del

Given the investment horizon of 90 days Australian Oilseeds Holdings is expected to generate 4.35 times more return on investment than Fresh Del. However, Australian Oilseeds is 4.35 times more volatile than Fresh Del Monte. It trades about 0.05 of its potential returns per unit of risk. Fresh Del Monte is currently generating about -0.16 per unit of risk. If you would invest  119.00  in Australian Oilseeds Holdings on December 26, 2024 and sell it today you would earn a total of  11.00  from holding Australian Oilseeds Holdings or generate 9.24% return on investment over 90 days.

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

Australian Oilseeds Holdings  vs.  Fresh Del Monte

Australian Oilseeds

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Australian Oilseeds Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Australian Oilseeds unveiled solid returns over the last few months and may actually be approaching a breakup point.

Fresh Del Monte

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fresh Del Monte has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Australian Oilseeds and Fresh Del

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

The idea behind Australian Oilseeds Holdings and Fresh Del Monte 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.