Correlation Between AGRICULTBK HADR/25 and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR/25 and HYDROFARM HLD 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 AGRICULTBK HADR/25 and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICULTBK HADR25 YC and HYDROFARM HLD GRP, you can compare the effects of market volatilities on AGRICULTBK HADR/25 and HYDROFARM HLD 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 AGRICULTBK HADR/25 with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR/25 and HYDROFARM HLD.
Diversification Opportunities for AGRICULTBK HADR/25 and HYDROFARM HLD
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AGRICULTBK and HYDROFARM is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP and AGRICULTBK HADR/25 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 AGRICULTBK HADR25 YC are associated (or correlated) with HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of AGRICULTBK HADR/25 i.e., AGRICULTBK HADR/25 and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between AGRICULTBK HADR/25 and HYDROFARM HLD
Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.45 times more return on investment than HYDROFARM HLD. However, AGRICULTBK HADR25 YC is 2.2 times less risky than HYDROFARM HLD. It trades about 0.07 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about 0.01 per unit of risk. If you would invest 701.00 in AGRICULTBK HADR25 YC on August 28, 2024 and sell it today you would earn a total of 439.00 from holding AGRICULTBK HADR25 YC or generate 62.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICULTBK HADR25 YC vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| AGRICULTBK HADR/25 |
| HYDROFARM HLD GRP |
AGRICULTBK HADR/25 and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICULTBK HADR/25 and HYDROFARM HLD
The main advantage of trading using opposite AGRICULTBK HADR/25 and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR/25 position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| AGRICULTBK HADR/25 vs. The Toronto Dominion Bank | AGRICULTBK HADR/25 vs. Superior Plus Corp | AGRICULTBK HADR/25 vs. NMI Holdings | AGRICULTBK HADR/25 vs. Origin Agritech |
| HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. NMI Holdings | HYDROFARM HLD vs. Origin Agritech | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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