Correlation Between Forafric Global and NaturalShrimp
Can any of the company-specific risk be diversified away by investing in both Forafric Global and NaturalShrimp 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 NaturalShrimp 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 NaturalShrimp, you can compare the effects of market volatilities on Forafric Global and NaturalShrimp 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 NaturalShrimp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and NaturalShrimp.
Diversification Opportunities for Forafric Global and NaturalShrimp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Forafric and NaturalShrimp is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and NaturalShrimp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NaturalShrimp 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 NaturalShrimp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NaturalShrimp has no effect on the direction of Forafric Global i.e., Forafric Global and NaturalShrimp go up and down completely randomly.
Pair Corralation between Forafric Global and NaturalShrimp
Assuming the 90 days horizon Forafric Global PLC is expected to generate 0.51 times more return on investment than NaturalShrimp. However, Forafric Global PLC is 1.95 times less risky than NaturalShrimp. It trades about -0.14 of its potential returns per unit of risk. NaturalShrimp is currently generating about -0.16 per unit of risk. If you would invest 136.00 in Forafric Global PLC on August 28, 2024 and sell it today you would lose (27.00) from holding Forafric Global PLC or give up 19.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Forafric Global PLC vs. NaturalShrimp
Performance |
| Timeline |
| Forafric Global PLC |
| NaturalShrimp |
Forafric Global and NaturalShrimp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forafric Global and NaturalShrimp
The main advantage of trading using opposite Forafric Global and NaturalShrimp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forafric Global position performs unexpectedly, NaturalShrimp 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 NaturalShrimp will offset losses from the drop in NaturalShrimp'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 |
| NaturalShrimp vs. Embotelladora Andina SA | NaturalShrimp vs. Signet International Holdings | NaturalShrimp vs. National Beverage Corp | NaturalShrimp vs. PT Astra International |
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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