Correlation Between Golden Agri and AquaBounty Technologies
Can any of the company-specific risk be diversified away by investing in both Golden Agri and AquaBounty Technologies 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 and AquaBounty Technologies 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 AquaBounty Technologies, you can compare the effects of market volatilities on Golden Agri and AquaBounty Technologies 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 with a short position of AquaBounty Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri and AquaBounty Technologies.
Diversification Opportunities for Golden Agri and AquaBounty Technologies
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and AquaBounty is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and AquaBounty Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AquaBounty Technologies and Golden Agri 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 AquaBounty Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AquaBounty Technologies has no effect on the direction of Golden Agri i.e., Golden Agri and AquaBounty Technologies go up and down completely randomly.
Pair Corralation between Golden Agri and AquaBounty Technologies
Assuming the 90 days horizon Golden Agri Resources is expected to generate 0.74 times more return on investment than AquaBounty Technologies. However, Golden Agri Resources is 1.35 times less risky than AquaBounty Technologies. It trades about 0.02 of its potential returns per unit of risk. AquaBounty Technologies is currently generating about -0.02 per unit of risk. If you would invest 20.00 in Golden Agri Resources on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Golden Agri Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 56.09% |
| Values | Daily Returns |
Golden Agri Resources vs. AquaBounty Technologies
Performance |
| Timeline |
| Golden Agri Resources |
| AquaBounty Technologies |
Golden Agri and AquaBounty Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri and AquaBounty Technologies
The main advantage of trading using opposite Golden Agri and AquaBounty Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri position performs unexpectedly, AquaBounty Technologies 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 AquaBounty Technologies will offset losses from the drop in AquaBounty Technologies' long position.| Golden Agri vs. Wilmar International | Golden Agri vs. SLC Agricola SA | Golden Agri vs. Brasilagro Adr | Golden Agri vs. Alico Inc |
| AquaBounty Technologies vs. Atlantic Sapphire ASA | AquaBounty Technologies vs. Local Bounti Corp | AquaBounty Technologies vs. Forafric Global PLC | AquaBounty Technologies vs. Forafric Global PLC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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