Correlation Between Adecoagro and Above Food
Can any of the company-specific risk be diversified away by investing in both Adecoagro and Above Food 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 Adecoagro and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecoagro SA and Above Food Ingredients, you can compare the effects of market volatilities on Adecoagro and Above Food 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 Adecoagro with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecoagro and Above Food.
Diversification Opportunities for Adecoagro and Above Food
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adecoagro and Above is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Adecoagro SA and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Adecoagro 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 Adecoagro SA are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Adecoagro i.e., Adecoagro and Above Food go up and down completely randomly.
Pair Corralation between Adecoagro and Above Food
Given the investment horizon of 90 days Adecoagro SA is expected to generate 0.2 times more return on investment than Above Food. However, Adecoagro SA is 5.08 times less risky than Above Food. It trades about 0.02 of its potential returns per unit of risk. Above Food Ingredients is currently generating about -0.1 per unit of risk. If you would invest 1,068 in Adecoagro SA on September 3, 2024 and sell it today you would earn a total of 22.00 from holding Adecoagro SA or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Adecoagro SA vs. Above Food Ingredients
Performance |
| Timeline |
| Adecoagro SA |
| Above Food Ingredients |
Adecoagro and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecoagro and Above Food
The main advantage of trading using opposite Adecoagro and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecoagro position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| Adecoagro vs. Limoneira Co | Adecoagro vs. Dole PLC | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine Foods |
| Above Food vs. Visteon Corp | Above Food vs. Valneva SE ADR | Above Food vs. Brunswick | Above Food vs. NETGEAR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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