Correlation Between ENGlobal and Agrify Corp
Can any of the company-specific risk be diversified away by investing in both ENGlobal and Agrify Corp 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 ENGlobal and Agrify Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGlobal and Agrify Corp, you can compare the effects of market volatilities on ENGlobal and Agrify Corp 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 ENGlobal with a short position of Agrify Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGlobal and Agrify Corp.
Diversification Opportunities for ENGlobal and Agrify Corp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between ENGlobal and Agrify is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding ENGlobal and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and ENGlobal 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 ENGlobal are associated (or correlated) with Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of ENGlobal i.e., ENGlobal and Agrify Corp go up and down completely randomly.
Pair Corralation between ENGlobal and Agrify Corp
Considering the 90-day investment horizon ENGlobal is expected to generate 459.41 times less return on investment than Agrify Corp. But when comparing it to its historical volatility, ENGlobal is 4.96 times less risky than Agrify Corp. It trades about 0.01 of its potential returns per unit of risk. Agrify Corp is currently generating about 0.67 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Agrify Corp on August 27, 2024 and sell it today you would earn a total of 4,426 from holding Agrify Corp or generate 1317.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENGlobal vs. Agrify Corp
Performance |
| Timeline |
| ENGlobal |
| Agrify Corp |
ENGlobal and Agrify Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENGlobal and Agrify Corp
The main advantage of trading using opposite ENGlobal and Agrify Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGlobal position performs unexpectedly, Agrify Corp 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 Agrify Corp will offset losses from the drop in Agrify Corp's long position.The idea behind ENGlobal and Agrify Corp 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.| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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