Correlation Between Ag Growth and American Premium
Can any of the company-specific risk be diversified away by investing in both Ag Growth and American Premium 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 Ag Growth and American Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ag Growth International and American Premium Water, you can compare the effects of market volatilities on Ag Growth and American Premium 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 Ag Growth with a short position of American Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ag Growth and American Premium.
Diversification Opportunities for Ag Growth and American Premium
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between AGGZF and American is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ag Growth International and American Premium Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Premium Water and Ag Growth 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 Ag Growth International are associated (or correlated) with American Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Premium Water has no effect on the direction of Ag Growth i.e., Ag Growth and American Premium go up and down completely randomly.
Pair Corralation between Ag Growth and American Premium
Assuming the 90 days horizon Ag Growth is expected to generate 89.97 times less return on investment than American Premium. But when comparing it to its historical volatility, Ag Growth International is 109.73 times less risky than American Premium. It trades about 0.23 of its potential returns per unit of risk. American Premium Water is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 0.00 in American Premium Water on August 24, 2024 and sell it today you would earn a total of 0.00 from holding American Premium Water or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ag Growth International vs. American Premium Water
Performance |
| Timeline |
| Ag Growth International |
| American Premium Water |
Ag Growth and American Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ag Growth and American Premium
The main advantage of trading using opposite Ag Growth and American Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ag Growth position performs unexpectedly, American Premium 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 American Premium will offset losses from the drop in American Premium's long position.| Ag Growth vs. Element Solutions | Ag Growth vs. Orion Engineered Carbons | Ag Growth vs. Minerals Technologies | Ag Growth vs. Ingevity Corp |
| American Premium vs. First Tractor | American Premium vs. Ag Growth International | American Premium vs. AmeraMex International | American Premium vs. Arts Way Manufacturing Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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