Correlation Between Golden Agri and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Golden Agri and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on Golden Agri and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri and Tyson Foods.
Diversification Opportunities for Golden Agri and Tyson Foods
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Golden and Tyson is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Golden Agri i.e., Golden Agri and Tyson Foods go up and down completely randomly.
Pair Corralation between Golden Agri and Tyson Foods
Assuming the 90 days horizon Golden Agri Resources is expected to generate 3.27 times more return on investment than Tyson Foods. However, Golden Agri is 3.27 times more volatile than Tyson Foods. It trades about 0.03 of its potential returns per unit of risk. Tyson Foods is currently generating about 0.06 per unit of risk. If you would invest 18.00 in Golden Agri Resources on August 29, 2024 and sell it today you would earn a total of 2.00 from holding Golden Agri Resources or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 55.98% |
| Values | Daily Returns |
Golden Agri Resources vs. Tyson Foods
Performance |
| Timeline |
| Golden Agri Resources |
| Tyson Foods |
Golden Agri and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri and Tyson Foods
The main advantage of trading using opposite Golden Agri and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Golden Agri vs. Avi Ltd ADR | Golden Agri vs. Altavoz Entertainment | Golden Agri vs. Aryzta AG PK | Golden Agri vs. Artisan Consumer Goods |
| Tyson Foods vs. Bellring Brands LLC | Tyson Foods vs. Ingredion Incorporated | Tyson Foods vs. Nomad Foods | Tyson Foods vs. Simply Good Foods |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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