Correlation Between AgriFORCE Growing and AppHarvest
Can any of the company-specific risk be diversified away by investing in both AgriFORCE Growing and AppHarvest 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 AppHarvest 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 AppHarvest, you can compare the effects of market volatilities on AgriFORCE Growing and AppHarvest 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 AppHarvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgriFORCE Growing and AppHarvest.
Diversification Opportunities for AgriFORCE Growing and AppHarvest
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AgriFORCE and AppHarvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AgriFORCE Growing Systems and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest 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 AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of AgriFORCE Growing i.e., AgriFORCE Growing and AppHarvest go up and down completely randomly.
Pair Corralation between AgriFORCE Growing and AppHarvest
Assuming the 90 days horizon AgriFORCE Growing Systems is expected to generate 2.46 times more return on investment than AppHarvest. However, AgriFORCE Growing is 2.46 times more volatile than AppHarvest. It trades about 0.11 of its potential returns per unit of risk. AppHarvest is currently generating about -0.08 per unit of risk. If you would invest 11.00 in AgriFORCE Growing Systems on November 5, 2024 and sell it today you would lose (10.56) from holding AgriFORCE Growing Systems or give up 96.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 38.95% |
| Values | Daily Returns |
AgriFORCE Growing Systems vs. AppHarvest
Performance |
| Timeline |
| AgriFORCE Growing Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AgriFORCE Growing and AppHarvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AgriFORCE Growing and AppHarvest
The main advantage of trading using opposite AgriFORCE Growing and AppHarvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AgriFORCE Growing position performs unexpectedly, AppHarvest 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 AppHarvest will offset losses from the drop in AppHarvest's long position.The idea behind AgriFORCE Growing Systems and AppHarvest pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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