Correlation Between Golden Agri and Vital Farms
Can any of the company-specific risk be diversified away by investing in both Golden Agri and Vital Farms 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 Vital Farms 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 Vital Farms, you can compare the effects of market volatilities on Golden Agri and Vital Farms 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 Vital Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri and Vital Farms.
Diversification Opportunities for Golden Agri and Vital Farms
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and Vital is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Vital Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vital Farms 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 Vital Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vital Farms has no effect on the direction of Golden Agri i.e., Golden Agri and Vital Farms go up and down completely randomly.
Pair Corralation between Golden Agri and Vital Farms
Assuming the 90 days horizon Golden Agri Resources is expected to generate 0.32 times more return on investment than Vital Farms. However, Golden Agri Resources is 3.1 times less risky than Vital Farms. It trades about -0.32 of its potential returns per unit of risk. Vital Farms is currently generating about -0.1 per unit of risk. If you would invest 22.00 in Golden Agri Resources on August 28, 2024 and sell it today you would lose (2.00) from holding Golden Agri Resources or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Agri Resources vs. Vital Farms
Performance |
| Timeline |
| Golden Agri Resources |
| Vital Farms |
Golden Agri and Vital Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri and Vital Farms
The main advantage of trading using opposite Golden Agri and Vital Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri position performs unexpectedly, Vital Farms 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 Vital Farms will offset losses from the drop in Vital Farms' 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 |
| Vital Farms vs. Fresh Del Monte | Vital Farms vs. Alico Inc | Vital Farms vs. SW Seed Company | Vital Farms vs. Adecoagro SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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