Correlation Between Forafric Global and Australian Agricultural
Can any of the company-specific risk be diversified away by investing in both Forafric Global and Australian Agricultural 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 Australian Agricultural 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 Australian Agricultural, you can compare the effects of market volatilities on Forafric Global and Australian Agricultural 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 Australian Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and Australian Agricultural.
Diversification Opportunities for Forafric Global and Australian Agricultural
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forafric and Australian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and Australian Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Agricultural 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 Australian Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Agricultural has no effect on the direction of Forafric Global i.e., Forafric Global and Australian Agricultural go up and down completely randomly.
Pair Corralation between Forafric Global and Australian Agricultural
Assuming the 90 days horizon Forafric Global PLC is expected to under-perform the Australian Agricultural. In addition to that, Forafric Global is 4.52 times more volatile than Australian Agricultural. It trades about -0.07 of its total potential returns per unit of risk. Australian Agricultural is currently generating about -0.21 per unit of volatility. If you would invest 90.00 in Australian Agricultural on October 25, 2024 and sell it today you would lose (6.00) from holding Australian Agricultural or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.78% |
| Values | Daily Returns |
Forafric Global PLC vs. Australian Agricultural
Performance |
| Timeline |
| Forafric Global PLC |
| Australian Agricultural |
Forafric Global and Australian Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forafric Global and Australian Agricultural
The main advantage of trading using opposite Forafric Global and Australian Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forafric Global position performs unexpectedly, Australian Agricultural 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 Australian Agricultural will offset losses from the drop in Australian Agricultural's long position.| Forafric Global vs. Forafric Global PLC | Forafric Global vs. Reservoir Media Management | Forafric Global vs. Arbe Robotics Ltd | Forafric Global vs. ADS TEC ENERGY PLC |
| Australian Agricultural vs. GrainCorp Limited | Australian Agricultural vs. Forafric Global PLC | Australian Agricultural vs. Forafric Global PLC | Australian Agricultural vs. Limoneira Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stocks Directory Find actively traded stocks across global markets |