Correlation Between Agro Capital and Alliance Global
Can any of the company-specific risk be diversified away by investing in both Agro Capital and Alliance 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 Agro Capital and Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agro Capital Management and Alliance Global Group, you can compare the effects of market volatilities on Agro Capital and Alliance 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 Agro Capital with a short position of Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agro Capital and Alliance Global.
Diversification Opportunities for Agro Capital and Alliance Global
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agro and Alliance is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Agro Capital Management and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group and Agro Capital 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 Agro Capital Management are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of Agro Capital i.e., Agro Capital and Alliance Global go up and down completely randomly.
Pair Corralation between Agro Capital and Alliance Global
Given the investment horizon of 90 days Agro Capital Management is expected to generate 3.42 times more return on investment than Alliance Global. However, Agro Capital is 3.42 times more volatile than Alliance Global Group. It trades about 0.02 of its potential returns per unit of risk. Alliance Global Group is currently generating about -0.08 per unit of risk. If you would invest 6.00 in Agro Capital Management on November 18, 2024 and sell it today you would lose (1.04) from holding Agro Capital Management or give up 17.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agro Capital Management vs. Alliance Global Group
Performance |
| Timeline |
| Agro Capital Management |
| Alliance Global Group |
Agro Capital and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agro Capital and Alliance Global
The main advantage of trading using opposite Agro Capital and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agro Capital position performs unexpectedly, Alliance 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| Agro Capital vs. Alliance Recovery | Agro Capital vs. Ayala | Agro Capital vs. Alaska Power Telephone | Agro Capital vs. Ayala Corp ADR |
| Alliance Global vs. Alliance Recovery | Alliance Global vs. Ayala | Alliance Global vs. Alaska Power Telephone | Alliance Global vs. RCABS Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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