Correlation Between Agroliga Group and Novina SA
Can any of the company-specific risk be diversified away by investing in both Agroliga Group and Novina SA 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 Novina SA 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 Novina SA, you can compare the effects of market volatilities on Agroliga Group and Novina SA 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 Novina SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agroliga Group and Novina SA.
Diversification Opportunities for Agroliga Group and Novina SA
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agroliga and Novina is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Agroliga Group PLC and Novina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novina SA 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 Novina SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novina SA has no effect on the direction of Agroliga Group i.e., Agroliga Group and Novina SA go up and down completely randomly.
Pair Corralation between Agroliga Group and Novina SA
Assuming the 90 days trading horizon Agroliga Group is expected to generate 9.92 times less return on investment than Novina SA. But when comparing it to its historical volatility, Agroliga Group PLC is 2.56 times less risky than Novina SA. It trades about 0.01 of its potential returns per unit of risk. Novina SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Novina SA on August 27, 2024 and sell it today you would earn a total of 46.00 from holding Novina SA or generate 65.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.09% |
| Values | Daily Returns |
Agroliga Group PLC vs. Novina SA
Performance |
| Timeline |
| Agroliga Group PLC |
| Novina SA |
Agroliga Group and Novina SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agroliga Group and Novina SA
The main advantage of trading using opposite Agroliga Group and Novina SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agroliga Group position performs unexpectedly, Novina SA 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 Novina SA will offset losses from the drop in Novina SA's long position.| Agroliga Group vs. Clean Carbon Energy | Agroliga Group vs. ADX | Agroliga Group vs. Vee SA | Agroliga Group vs. Novina SA |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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