Correlation Between Forafric Global and Atlantic Sapphire
Can any of the company-specific risk be diversified away by investing in both Forafric Global and Atlantic Sapphire 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 Forafric Global and Atlantic Sapphire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forafric Global PLC and Atlantic Sapphire ASA, you can compare the effects of market volatilities on Forafric Global and Atlantic Sapphire 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 Forafric Global with a short position of Atlantic Sapphire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and Atlantic Sapphire.
Diversification Opportunities for Forafric Global and Atlantic Sapphire
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Forafric and Atlantic is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and Atlantic Sapphire ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire ASA and Forafric Global 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 Forafric Global PLC are associated (or correlated) with Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire ASA has no effect on the direction of Forafric Global i.e., Forafric Global and Atlantic Sapphire go up and down completely randomly.
Pair Corralation between Forafric Global and Atlantic Sapphire
Given the investment horizon of 90 days Forafric Global PLC is expected to generate 0.12 times more return on investment than Atlantic Sapphire. However, Forafric Global PLC is 8.36 times less risky than Atlantic Sapphire. It trades about 0.0 of its potential returns per unit of risk. Atlantic Sapphire ASA is currently generating about -0.04 per unit of risk. If you would invest 1,125 in Forafric Global PLC on September 19, 2024 and sell it today you would lose (97.00) from holding Forafric Global PLC or give up 8.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Forafric Global PLC vs. Atlantic Sapphire ASA
Performance |
| Timeline |
| Forafric Global PLC |
| Atlantic Sapphire ASA |
Forafric Global and Atlantic Sapphire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forafric Global and Atlantic Sapphire
The main advantage of trading using opposite Forafric Global and Atlantic Sapphire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forafric Global position performs unexpectedly, Atlantic Sapphire 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 Atlantic Sapphire will offset losses from the drop in Atlantic Sapphire's long position.| Forafric Global vs. Forafric Global PLC | Forafric Global vs. GrainCorp Limited | Forafric Global vs. Australian Agricultural | Forafric Global vs. Fresh Del Monte |
| Atlantic Sapphire vs. Forafric Global PLC | Atlantic Sapphire vs. Forafric Global PLC | Atlantic Sapphire vs. GrainCorp Limited | Atlantic Sapphire vs. Australian Agricultural |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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