Correlation Between African Agriculture and Sabre Corpo
Can any of the company-specific risk be diversified away by investing in both African Agriculture and Sabre Corpo 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 African Agriculture and Sabre Corpo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between African Agriculture Holdings and Sabre Corpo, you can compare the effects of market volatilities on African Agriculture and Sabre Corpo 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 African Agriculture with a short position of Sabre Corpo. Check out your portfolio center. Please also check ongoing floating volatility patterns of African Agriculture and Sabre Corpo.
Diversification Opportunities for African Agriculture and Sabre Corpo
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between African and Sabre is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding African Agriculture Holdings and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo and African Agriculture 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 African Agriculture Holdings are associated (or correlated) with Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of African Agriculture i.e., African Agriculture and Sabre Corpo go up and down completely randomly.
Pair Corralation between African Agriculture and Sabre Corpo
Assuming the 90 days horizon African Agriculture Holdings is expected to generate 9.02 times more return on investment than Sabre Corpo. However, African Agriculture is 9.02 times more volatile than Sabre Corpo. It trades about 0.06 of its potential returns per unit of risk. Sabre Corpo is currently generating about 0.01 per unit of risk. If you would invest 3.11 in African Agriculture Holdings on September 12, 2024 and sell it today you would lose (2.74) from holding African Agriculture Holdings or give up 88.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 74.19% |
| Values | Daily Returns |
African Agriculture Holdings vs. Sabre Corpo
Performance |
| Timeline |
| African Agriculture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Sabre Corpo |
African Agriculture and Sabre Corpo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with African Agriculture and Sabre Corpo
The main advantage of trading using opposite African Agriculture and Sabre Corpo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if African Agriculture position performs unexpectedly, Sabre Corpo 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 Sabre Corpo will offset losses from the drop in Sabre Corpo's long position.| African Agriculture vs. Sabre Corpo | African Agriculture vs. Verde Clean Fuels | African Agriculture vs. Sandstorm Gold Ltd | African Agriculture vs. Eldorado Gold Corp |
| Sabre Corpo vs. Expedia Group | Sabre Corpo vs. Trip Group Ltd | Sabre Corpo vs. Booking Holdings | Sabre Corpo vs. Despegar Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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