Correlation Between Agrify Corp and Alliance Resource
Can any of the company-specific risk be diversified away by investing in both Agrify Corp and Alliance Resource 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 Alliance Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrify Corp and Alliance Resource Partners, you can compare the effects of market volatilities on Agrify Corp and Alliance Resource 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 Alliance Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrify Corp and Alliance Resource.
Diversification Opportunities for Agrify Corp and Alliance Resource
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agrify and Alliance is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Agrify Corp and Alliance Resource Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Resource 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 Alliance Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Resource has no effect on the direction of Agrify Corp i.e., Agrify Corp and Alliance Resource go up and down completely randomly.
Pair Corralation between Agrify Corp and Alliance Resource
Given the investment horizon of 90 days Agrify Corp is expected to generate 7.05 times more return on investment than Alliance Resource. However, Agrify Corp is 7.05 times more volatile than Alliance Resource Partners. It trades about 0.03 of its potential returns per unit of risk. Alliance Resource Partners is currently generating about 0.07 per unit of risk. If you would invest 24,000 in Agrify Corp on September 3, 2024 and sell it today you would lose (18,325) from holding Agrify Corp or give up 76.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrify Corp vs. Alliance Resource Partners
Performance |
| Timeline |
| Agrify Corp |
| Alliance Resource |
Agrify Corp and Alliance Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrify Corp and Alliance Resource
The main advantage of trading using opposite Agrify Corp and Alliance Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrify Corp position performs unexpectedly, Alliance Resource 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 Alliance Resource will offset losses from the drop in Alliance Resource'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 |
| Alliance Resource vs. Peabody Energy Corp | Alliance Resource vs. Natural Resource Partners | Alliance Resource vs. Hallador Energy | Alliance Resource vs. NACCO Industries |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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