Correlation Between Golden Agri-Resources and SLC Agricola
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and SLC Agricola 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 SLC Agricola 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 SLC Agricola SA, you can compare the effects of market volatilities on Golden Agri-Resources and SLC Agricola 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 SLC Agricola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and SLC Agricola.
Diversification Opportunities for Golden Agri-Resources and SLC Agricola
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Golden and SLC is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and SLC Agricola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLC Agricola SA 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 SLC Agricola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLC Agricola SA has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and SLC Agricola go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and SLC Agricola
Assuming the 90 days horizon Golden Agri Resources is expected to under-perform the SLC Agricola. But the pink sheet apears to be less risky and, when comparing its historical volatility, Golden Agri Resources is 1.14 times less risky than SLC Agricola. The pink sheet trades about -0.3 of its potential returns per unit of risk. The SLC Agricola SA is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 300.00 in SLC Agricola SA on August 30, 2024 and sell it today you would lose (11.00) from holding SLC Agricola SA or give up 3.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Agri Resources vs. SLC Agricola SA
Performance |
| Timeline |
| Golden Agri Resources |
| SLC Agricola SA |
Golden Agri-Resources and SLC Agricola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and SLC Agricola
The main advantage of trading using opposite Golden Agri-Resources and SLC Agricola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, SLC Agricola 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 SLC Agricola will offset losses from the drop in SLC Agricola'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 |
| SLC Agricola vs. Golden Agri Resources | SLC Agricola vs. Wilmar International | SLC Agricola vs. Brasilagro Adr | SLC Agricola vs. Alico Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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