Correlation Between Astra Agro and Forafric Global
Can any of the company-specific risk be diversified away by investing in both Astra Agro and Forafric Global 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 Astra Agro and Forafric Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Agro Lestari and Forafric Global PLC, you can compare the effects of market volatilities on Astra Agro and Forafric Global 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 Astra Agro with a short position of Forafric Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and Forafric Global.
Diversification Opportunities for Astra Agro and Forafric Global
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Forafric is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and Forafric Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forafric Global PLC and Astra Agro 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 Astra Agro Lestari are associated (or correlated) with Forafric Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forafric Global PLC has no effect on the direction of Astra Agro i.e., Astra Agro and Forafric Global go up and down completely randomly.
Pair Corralation between Astra Agro and Forafric Global
Assuming the 90 days horizon Astra Agro Lestari is expected to under-perform the Forafric Global. In addition to that, Astra Agro is 1.54 times more volatile than Forafric Global PLC. It trades about -0.06 of its total potential returns per unit of risk. Forafric Global PLC is currently generating about -0.01 per unit of volatility. If you would invest 1,120 in Forafric Global PLC on August 31, 2024 and sell it today you would lose (97.00) from holding Forafric Global PLC or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.79% |
| Values | Daily Returns |
Astra Agro Lestari vs. Forafric Global PLC
Performance |
| Timeline |
| Astra Agro Lestari |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Forafric Global PLC |
Astra Agro and Forafric Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Agro and Forafric Global
The main advantage of trading using opposite Astra Agro and Forafric Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, Forafric Global 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 Forafric Global will offset losses from the drop in Forafric Global's long position.| Astra Agro vs. Forafric Global PLC | Astra Agro vs. Forafric Global PLC | Astra Agro vs. Australian Agricultural | Astra Agro vs. Limoneira Co |
| Forafric Global vs. Forafric Global PLC | Forafric Global vs. GrainCorp Limited | Forafric Global vs. Australian Agricultural | Forafric Global vs. Fresh Del Monte |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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