Correlation Between Adaro Energy and Agrify Corp
Can any of the company-specific risk be diversified away by investing in both Adaro Energy and Agrify Corp 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 Adaro Energy and Agrify Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adaro Energy Tbk and Agrify Corp, you can compare the effects of market volatilities on Adaro Energy and Agrify Corp 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 Adaro Energy with a short position of Agrify Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adaro Energy and Agrify Corp.
Diversification Opportunities for Adaro Energy and Agrify Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adaro and Agrify is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Adaro Energy Tbk and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and Adaro Energy 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 Adaro Energy Tbk are associated (or correlated) with Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of Adaro Energy i.e., Adaro Energy and Agrify Corp go up and down completely randomly.
Pair Corralation between Adaro Energy and Agrify Corp
Assuming the 90 days horizon Adaro Energy is expected to generate 1.08 times less return on investment than Agrify Corp. But when comparing it to its historical volatility, Adaro Energy Tbk is 1.49 times less risky than Agrify Corp. It trades about 0.04 of its potential returns per unit of risk. Agrify Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 24,000 in Agrify Corp on September 3, 2024 and sell it today you would lose (18,325) from holding Agrify Corp or give up 76.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.14% |
| Values | Daily Returns |
Adaro Energy Tbk vs. Agrify Corp
Performance |
| Timeline |
| Adaro Energy Tbk |
| Agrify Corp |
Adaro Energy and Agrify Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adaro Energy and Agrify Corp
The main advantage of trading using opposite Adaro Energy and Agrify Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adaro Energy position performs unexpectedly, Agrify Corp 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 Agrify Corp will offset losses from the drop in Agrify Corp's long position.| Adaro Energy vs. Thungela Resources Limited | Adaro Energy vs. Geo Energy Resources | Adaro Energy vs. Bukit Asam Tbk | Adaro Energy vs. China Shenhua Energy |
| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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