Correlation Between Agrify Corp and Hydrofarm Holdings
Can any of the company-specific risk be diversified away by investing in both Agrify Corp and Hydrofarm Holdings 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 Hydrofarm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrify Corp and Hydrofarm Holdings Group, you can compare the effects of market volatilities on Agrify Corp and Hydrofarm Holdings 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 Hydrofarm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrify Corp and Hydrofarm Holdings.
Diversification Opportunities for Agrify Corp and Hydrofarm Holdings
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agrify and Hydrofarm is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Agrify Corp and Hydrofarm Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrofarm Holdings 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 Hydrofarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrofarm Holdings has no effect on the direction of Agrify Corp i.e., Agrify Corp and Hydrofarm Holdings go up and down completely randomly.
Pair Corralation between Agrify Corp and Hydrofarm Holdings
Given the investment horizon of 90 days Agrify Corp is expected to generate 4.14 times more return on investment than Hydrofarm Holdings. However, Agrify Corp is 4.14 times more volatile than Hydrofarm Holdings Group. It trades about 0.56 of its potential returns per unit of risk. Hydrofarm Holdings Group is currently generating about -0.04 per unit of risk. If you would invest 353.00 in Agrify Corp on August 24, 2024 and sell it today you would earn a total of 3,245 from holding Agrify Corp or generate 919.26% 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. Hydrofarm Holdings Group
Performance |
| Timeline |
| Agrify Corp |
| Hydrofarm Holdings |
Agrify Corp and Hydrofarm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrify Corp and Hydrofarm Holdings
The main advantage of trading using opposite Agrify Corp and Hydrofarm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrify Corp position performs unexpectedly, Hydrofarm Holdings 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 Hydrofarm Holdings will offset losses from the drop in Hydrofarm Holdings' long position.| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
| Hydrofarm Holdings vs. Gencor Industries | Hydrofarm Holdings vs. CEA Industries | Hydrofarm Holdings vs. Arts Way Manufacturing Co | Hydrofarm Holdings vs. CubicFarm Systems Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stocks Directory Find actively traded stocks across global markets |