Correlation Between Adecoagro and Farmmi
Can any of the company-specific risk be diversified away by investing in both Adecoagro and Farmmi 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 Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecoagro SA and Farmmi Inc, you can compare the effects of market volatilities on Adecoagro and Farmmi 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 Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecoagro and Farmmi.
Diversification Opportunities for Adecoagro and Farmmi
Good diversification
The 3 months correlation between Adecoagro and Farmmi is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Adecoagro SA and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc 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 Farmmi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmmi Inc has no effect on the direction of Adecoagro i.e., Adecoagro and Farmmi go up and down completely randomly.
Pair Corralation between Adecoagro and Farmmi
Given the investment horizon of 90 days Adecoagro SA is expected to generate 0.87 times more return on investment than Farmmi. However, Adecoagro SA is 1.15 times less risky than Farmmi. It trades about 0.21 of its potential returns per unit of risk. Farmmi Inc is currently generating about -0.09 per unit of risk. If you would invest 949.00 in Adecoagro SA on November 28, 2024 and sell it today you would earn a total of 121.50 from holding Adecoagro SA or generate 12.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecoagro SA vs. Farmmi Inc
Performance |
| Timeline |
| Adecoagro SA |
| Farmmi Inc |
Adecoagro and Farmmi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecoagro and Farmmi
The main advantage of trading using opposite Adecoagro and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecoagro position performs unexpectedly, Farmmi 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 Farmmi will offset losses from the drop in Farmmi's long position.| Adecoagro vs. Limoneira Co | Adecoagro vs. Dole PLC | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine Foods |
| Farmmi vs. Bit Origin | Farmmi vs. Better Choice | Farmmi vs. Laird Superfood | Farmmi vs. Arcadia Biosciences |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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