Correlation Between Agroliga Group and NGG
Can any of the company-specific risk be diversified away by investing in both Agroliga Group and NGG 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 Agroliga Group and NGG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agroliga Group PLC and NGG, you can compare the effects of market volatilities on Agroliga Group and NGG 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 Agroliga Group with a short position of NGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agroliga Group and NGG.
Diversification Opportunities for Agroliga Group and NGG
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agroliga and NGG is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Agroliga Group PLC and NGG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGG and Agroliga Group 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 Agroliga Group PLC are associated (or correlated) with NGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGG has no effect on the direction of Agroliga Group i.e., Agroliga Group and NGG go up and down completely randomly.
Pair Corralation between Agroliga Group and NGG
Assuming the 90 days trading horizon Agroliga Group is expected to generate 2.57 times less return on investment than NGG. But when comparing it to its historical volatility, Agroliga Group PLC is 2.19 times less risky than NGG. It trades about 0.1 of its potential returns per unit of risk. NGG is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3.28 in NGG on August 28, 2024 and sell it today you would earn a total of 0.32 from holding NGG or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Agroliga Group PLC vs. NGG
Performance |
| Timeline |
| Agroliga Group PLC |
| NGG |
Agroliga Group and NGG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agroliga Group and NGG
The main advantage of trading using opposite Agroliga Group and NGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agroliga Group position performs unexpectedly, NGG 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 NGG will offset losses from the drop in NGG's long position.| Agroliga Group vs. mBank SA | Agroliga Group vs. Noble Financials SA | Agroliga Group vs. UniCredit SpA | Agroliga Group vs. GreenX Metals |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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