Correlation Between Forafric Global and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Forafric Global and Adecoagro 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 Adecoagro 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 Adecoagro SA, you can compare the effects of market volatilities on Forafric Global and Adecoagro 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 Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and Adecoagro.
Diversification Opportunities for Forafric Global and Adecoagro
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Forafric and Adecoagro is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA 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 Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Forafric Global i.e., Forafric Global and Adecoagro go up and down completely randomly.
Pair Corralation between Forafric Global and Adecoagro
Given the investment horizon of 90 days Forafric Global PLC is expected to under-perform the Adecoagro. But the stock apears to be less risky and, when comparing its historical volatility, Forafric Global PLC is 1.64 times less risky than Adecoagro. The stock trades about -0.14 of its potential returns per unit of risk. The Adecoagro SA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,148 in Adecoagro SA on August 28, 2024 and sell it today you would lose (44.00) from holding Adecoagro SA or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forafric Global PLC vs. Adecoagro SA
Performance |
| Timeline |
| Forafric Global PLC |
| Adecoagro SA |
Forafric Global and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forafric Global and Adecoagro
The main advantage of trading using opposite Forafric Global and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forafric Global position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro'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 |
| Adecoagro vs. Bellring Brands LLC | Adecoagro vs. Ingredion Incorporated | Adecoagro vs. Nomad Foods | Adecoagro vs. Simply Good Foods |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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