Correlation Between Australian Agricultural and CVB Financial
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and CVB Financial 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 Agricultural and CVB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and CVB Financial Corp, you can compare the effects of market volatilities on Australian Agricultural and CVB Financial 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 Agricultural with a short position of CVB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and CVB Financial.
Diversification Opportunities for Australian Agricultural and CVB Financial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Australian and CVB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and CVB Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVB Financial Corp and Australian Agricultural 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 Agricultural are associated (or correlated) with CVB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVB Financial Corp has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and CVB Financial go up and down completely randomly.
Pair Corralation between Australian Agricultural and CVB Financial
Assuming the 90 days horizon Australian Agricultural is expected to generate 12.1 times less return on investment than CVB Financial. In addition to that, Australian Agricultural is 1.22 times more volatile than CVB Financial Corp. It trades about 0.01 of its total potential returns per unit of risk. CVB Financial Corp is currently generating about 0.14 per unit of volatility. If you would invest 1,574 in CVB Financial Corp on April 23, 2025 and sell it today you would earn a total of 206.00 from holding CVB Financial Corp or generate 13.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Australian Agricultural vs. CVB Financial Corp
Performance |
Timeline |
Australian Agricultural |
CVB Financial Corp |
Australian Agricultural and CVB Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Australian Agricultural and CVB Financial
The main advantage of trading using opposite Australian Agricultural and CVB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, CVB Financial 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 CVB Financial will offset losses from the drop in CVB Financial's long position.Australian Agricultural vs. Odyssean Investment Trust | Australian Agricultural vs. Delta Air Lines | Australian Agricultural vs. Postal Savings Bank | Australian Agricultural vs. Virtus Investment Partners |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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