Correlation Between Agrometal SAI and Grimoldi
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI and Grimoldi 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 Agrometal SAI and Grimoldi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Grimoldi SA, you can compare the effects of market volatilities on Agrometal SAI and Grimoldi 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 Agrometal SAI with a short position of Grimoldi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Grimoldi.
Diversification Opportunities for Agrometal SAI and Grimoldi
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agrometal and Grimoldi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Grimoldi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grimoldi SA and Agrometal SAI 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 Agrometal SAI are associated (or correlated) with Grimoldi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grimoldi SA has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Grimoldi go up and down completely randomly.
Pair Corralation between Agrometal SAI and Grimoldi
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 1.69 times more return on investment than Grimoldi. However, Agrometal SAI is 1.69 times more volatile than Grimoldi SA. It trades about 0.32 of its potential returns per unit of risk. Grimoldi SA is currently generating about 0.2 per unit of risk. If you would invest 5,250 in Agrometal SAI on September 19, 2024 and sell it today you would earn a total of 3,150 from holding Agrometal SAI or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Agrometal SAI vs. Grimoldi SA
Performance |
| Timeline |
| Agrometal SAI |
| Grimoldi SA |
Agrometal SAI and Grimoldi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Grimoldi
The main advantage of trading using opposite Agrometal SAI and Grimoldi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI position performs unexpectedly, Grimoldi 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 Grimoldi will offset losses from the drop in Grimoldi's long position.| Agrometal SAI vs. Telecom Argentina | Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. Compania de Transporte |
| Grimoldi vs. Agrometal SAI | Grimoldi vs. Harmony Gold Mining | Grimoldi vs. Telecom Argentina | Grimoldi vs. Compania de Transporte |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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