Correlation Between Nufarm and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both Nufarm and HYDROFARM HLD 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 Nufarm and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nufarm Limited and HYDROFARM HLD GRP, you can compare the effects of market volatilities on Nufarm and HYDROFARM HLD 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 Nufarm with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nufarm and HYDROFARM HLD.
Diversification Opportunities for Nufarm and HYDROFARM HLD
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nufarm and HYDROFARM is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nufarm Limited and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP and Nufarm 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 Nufarm Limited are associated (or correlated) with HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of Nufarm i.e., Nufarm and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between Nufarm and HYDROFARM HLD
Assuming the 90 days horizon Nufarm is expected to generate 80.89 times less return on investment than HYDROFARM HLD. But when comparing it to its historical volatility, Nufarm Limited is 65.49 times less risky than HYDROFARM HLD. It trades about 0.09 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 575.00 in HYDROFARM HLD GRP on December 30, 2024 and sell it today you would lose (45.00) from holding HYDROFARM HLD GRP or give up 7.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Nufarm Limited vs. HYDROFARM HLD GRP
Performance |
Timeline |
Nufarm Limited |
HYDROFARM HLD GRP |
Nufarm and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nufarm and HYDROFARM HLD
The main advantage of trading using opposite Nufarm and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nufarm position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.Nufarm vs. Japan Medical Dynamic | Nufarm vs. INDO RAMA SYNTHETIC | Nufarm vs. Quaker Chemical | Nufarm vs. SILICON LABORATOR |
HYDROFARM HLD vs. Cleanaway Waste Management | HYDROFARM HLD vs. Japan Post Insurance | HYDROFARM HLD vs. LIFENET INSURANCE CO | HYDROFARM HLD vs. Treasury Wine Estates |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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