Correlation Between Agrify Corp and Adaro Energy
Can any of the company-specific risk be diversified away by investing in both Agrify Corp and Adaro Energy 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 Agrify Corp and Adaro Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrify Corp and Adaro Energy Tbk, you can compare the effects of market volatilities on Agrify Corp and Adaro Energy 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 Agrify Corp with a short position of Adaro Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrify Corp and Adaro Energy.
Diversification Opportunities for Agrify Corp and Adaro Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agrify and Adaro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Agrify Corp and Adaro Energy Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaro Energy Tbk and Agrify Corp 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 Agrify Corp are associated (or correlated) with Adaro Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaro Energy Tbk has no effect on the direction of Agrify Corp i.e., Agrify Corp and Adaro Energy go up and down completely randomly.
Pair Corralation between Agrify Corp and Adaro Energy
Given the investment horizon of 90 days Agrify Corp is expected to generate 2.5 times more return on investment than Adaro Energy. However, Agrify Corp is 2.5 times more volatile than Adaro Energy Tbk. It trades about 0.04 of its potential returns per unit of risk. Adaro Energy Tbk is currently generating about 0.05 per unit of risk. If you would invest 6,210 in Agrify Corp on September 4, 2024 and sell it today you would lose (1,042) from holding Agrify Corp or give up 16.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.96% |
| Values | Daily Returns |
Agrify Corp vs. Adaro Energy Tbk
Performance |
| Timeline |
| Agrify Corp |
| Adaro Energy Tbk |
Agrify Corp and Adaro Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrify Corp and Adaro Energy
The main advantage of trading using opposite Agrify Corp and Adaro Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrify Corp position performs unexpectedly, Adaro Energy 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 Adaro Energy will offset losses from the drop in Adaro Energy's long position.| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
| Adaro Energy vs. Morien Resources Corp | Adaro Energy vs. Alliance Resource Partners | Adaro Energy vs. Brera Holdings PLC | Adaro Energy vs. Jackson Financial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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