Correlation Between HEALTHCARE REAL and AUST AGRICULTURAL

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

By analyzing existing cross correlation between HEALTHCARE REAL A and AUST AGRICULTURAL, you can compare the effects of market volatilities on HEALTHCARE REAL and AUST AGRICULTURAL 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 HEALTHCARE REAL with a short position of AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE REAL and AUST AGRICULTURAL.

Diversification Opportunities for HEALTHCARE REAL and AUST AGRICULTURAL

0.18

Correlation Coefficient

HEALTHCARE REAL  AUST AGRICULTURAL

Average diversification

The 3 months correlation between HEALTHCARE and AUST is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE REAL A and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL and HEALTHCARE REAL 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 HEALTHCARE REAL A are associated (or correlated) with AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of HEALTHCARE REAL i.e., HEALTHCARE REAL and AUST AGRICULTURAL go up and down completely randomly.

Pair Corralation between HEALTHCARE REAL and AUST AGRICULTURAL

Assuming the 90 days horizon HEALTHCARE REAL A is expected to under-perform the AUST AGRICULTURAL. In addition to that, HEALTHCARE REAL is 1.13 times more volatile than AUST AGRICULTURAL. It trades about -0.08 of its total potential returns per unit of risk. AUST AGRICULTURAL is currently generating about 0.06 per unit of volatility. If you would invest  83.00  in AUST AGRICULTURAL on December 4, 2024 and sell it today you would earn a total of  3.00  from holding AUST AGRICULTURAL or generate 3.61% return on investment over 90 days.

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

HEALTHCARE REAL A  vs.  AUST AGRICULTURAL

HEALTHCARE REAL A

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEALTHCARE REAL A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

AUST AGRICULTURAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AUST AGRICULTURAL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AUST AGRICULTURAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HEALTHCARE REAL and AUST AGRICULTURAL

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

The idea behind HEALTHCARE REAL A and AUST AGRICULTURAL 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.