Correlation Between AgriFORCE Growing and Bunge
Can any of the company-specific risk be diversified away by investing in both AgriFORCE Growing and Bunge 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 AgriFORCE Growing and Bunge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AgriFORCE Growing Systems and Bunge Limited, you can compare the effects of market volatilities on AgriFORCE Growing and Bunge 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 AgriFORCE Growing with a short position of Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriFORCE Growing and Bunge.
Diversification Opportunities for AgriFORCE Growing and Bunge
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AgriFORCE and Bunge is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding AgriFORCE Growing Systems and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited and AgriFORCE Growing 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 AgriFORCE Growing Systems are associated (or correlated) with Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of AgriFORCE Growing i.e., AgriFORCE Growing and Bunge go up and down completely randomly.
Pair Corralation between AgriFORCE Growing and Bunge
Given the investment horizon of 90 days AgriFORCE Growing Systems is expected to under-perform the Bunge. In addition to that, AgriFORCE Growing is 4.71 times more volatile than Bunge Limited. It trades about -0.1 of its total potential returns per unit of risk. Bunge Limited is currently generating about -0.03 per unit of volatility. If you would invest 8,605 in Bunge Limited on November 5, 2024 and sell it today you would lose (1,089) from holding Bunge Limited or give up 12.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AgriFORCE Growing Systems vs. Bunge Limited
Performance |
| Timeline |
| AgriFORCE Growing Systems |
| Bunge Limited |
AgriFORCE Growing and Bunge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AgriFORCE Growing and Bunge
The main advantage of trading using opposite AgriFORCE Growing and Bunge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgriFORCE Growing position performs unexpectedly, Bunge 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 Bunge will offset losses from the drop in Bunge's long position.| AgriFORCE Growing vs. Limoneira Co | AgriFORCE Growing vs. Forafric Global PLC | AgriFORCE Growing vs. Australian Agricultural | AgriFORCE Growing vs. NaturalShrimp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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