Correlation Between Golden Agri-Resources and Global Clean
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Global Clean 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 Global Clean 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 Global Clean Energy, you can compare the effects of market volatilities on Golden Agri-Resources and Global Clean 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 Global Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Global Clean.
Diversification Opportunities for Golden Agri-Resources and Global Clean
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Global is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Global Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Clean Energy 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 Global Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Clean Energy has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Global Clean go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and Global Clean
Assuming the 90 days horizon Golden Agri-Resources is expected to generate 2.4 times less return on investment than Global Clean. But when comparing it to its historical volatility, Golden Agri Resources is 1.66 times less risky than Global Clean. It trades about 0.05 of its potential returns per unit of risk. Global Clean Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 95.00 in Global Clean Energy on November 6, 2024 and sell it today you would earn a total of 9.00 from holding Global Clean Energy or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.72% |
| Values | Daily Returns |
Golden Agri Resources vs. Global Clean Energy
Performance |
| Timeline |
| Golden Agri Resources |
| Global Clean Energy |
Golden Agri-Resources and Global Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and Global Clean
The main advantage of trading using opposite Golden Agri-Resources and Global Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, Global Clean 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 Global Clean will offset losses from the drop in Global Clean'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 |
| Global Clean vs. Edible Garden AG | Global Clean vs. Golden Agri Resources | Global Clean vs. Local Bounti Corp | Global Clean vs. Village Farms International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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