Correlation Between Golden Agri-Resources and AgriFORCE Growing
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and AgriFORCE Growing 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 Golden Agri-Resources and AgriFORCE Growing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Agri Resources and AgriFORCE Growing Systems, you can compare the effects of market volatilities on Golden Agri-Resources and AgriFORCE Growing 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 Golden Agri-Resources with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and AgriFORCE Growing.
Diversification Opportunities for Golden Agri-Resources and AgriFORCE Growing
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Golden and AgriFORCE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and AgriFORCE Growing Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriFORCE Growing Systems and Golden Agri-Resources 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 Golden Agri Resources are associated (or correlated) with AgriFORCE Growing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriFORCE Growing Systems has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and AgriFORCE Growing go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and AgriFORCE Growing
Assuming the 90 days horizon Golden Agri Resources is expected to generate 0.75 times more return on investment than AgriFORCE Growing. However, Golden Agri Resources is 1.33 times less risky than AgriFORCE Growing. It trades about 0.04 of its potential returns per unit of risk. AgriFORCE Growing Systems is currently generating about -0.15 per unit of risk. If you would invest 19.00 in Golden Agri Resources on November 6, 2024 and sell it today you would earn a total of 4.00 from holding Golden Agri Resources or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.91% |
| Values | Daily Returns |
Golden Agri Resources vs. AgriFORCE Growing Systems
Performance |
| Timeline |
| Golden Agri Resources |
| AgriFORCE Growing Systems |
Golden Agri-Resources and AgriFORCE Growing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and AgriFORCE Growing
The main advantage of trading using opposite Golden Agri-Resources and AgriFORCE Growing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, AgriFORCE Growing 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 AgriFORCE Growing will offset losses from the drop in AgriFORCE Growing's long position.| Golden Agri-Resources vs. Wilmar International | Golden Agri-Resources vs. SLC Agricola SA | Golden Agri-Resources vs. Brasilagro Adr | Golden Agri-Resources vs. Alico Inc |
| AgriFORCE Growing vs. Limoneira Co | AgriFORCE Growing vs. Forafric Global PLC | AgriFORCE Growing vs. Australian Agricultural | AgriFORCE Growing vs. Atlantic Sapphire ASA |
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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