Correlation Between Agrify Corp and Digital Locations
Can any of the company-specific risk be diversified away by investing in both Agrify Corp and Digital Locations 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 Digital Locations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrify Corp and Digital Locations, you can compare the effects of market volatilities on Agrify Corp and Digital Locations 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 Digital Locations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrify Corp and Digital Locations.
Diversification Opportunities for Agrify Corp and Digital Locations
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agrify and Digital is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Agrify Corp and Digital Locations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Locations 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 Digital Locations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Locations has no effect on the direction of Agrify Corp i.e., Agrify Corp and Digital Locations go up and down completely randomly.
Pair Corralation between Agrify Corp and Digital Locations
Given the investment horizon of 90 days Agrify Corp is expected to generate 1.95 times more return on investment than Digital Locations. However, Agrify Corp is 1.95 times more volatile than Digital Locations. It trades about 0.65 of its potential returns per unit of risk. Digital Locations is currently generating about -0.04 per unit of risk. If you would invest 319.00 in Agrify Corp on August 30, 2024 and sell it today you would earn a total of 5,136 from holding Agrify Corp or generate 1610.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrify Corp vs. Digital Locations
Performance |
| Timeline |
| Agrify Corp |
| Digital Locations |
Agrify Corp and Digital Locations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrify Corp and Digital Locations
The main advantage of trading using opposite Agrify Corp and Digital Locations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrify Corp position performs unexpectedly, Digital Locations 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 Digital Locations will offset losses from the drop in Digital Locations' long position.| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
| Digital Locations vs. JNS Holdings Corp | Digital Locations vs. Orion Group Holdings | Digital Locations vs. Arcadis NV | Digital Locations vs. VINCI SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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