Correlation Between Golden Agri-Resources and Alico
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Alico 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 Alico 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 Alico Inc, you can compare the effects of market volatilities on Golden Agri-Resources and Alico 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 Alico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Alico.
Diversification Opportunities for Golden Agri-Resources and Alico
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Alico is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Alico Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alico Inc 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 Alico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alico Inc has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Alico go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and Alico
Assuming the 90 days horizon Golden Agri Resources is expected to under-perform the Alico. But the pink sheet apears to be less risky and, when comparing its historical volatility, Golden Agri Resources is 3.26 times less risky than Alico. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Alico Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,639 in Alico Inc on November 2, 2024 and sell it today you would earn a total of 493.00 from holding Alico Inc or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Agri Resources vs. Alico Inc
Performance |
| Timeline |
| Golden Agri Resources |
| Alico Inc |
Golden Agri-Resources and Alico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and Alico
The main advantage of trading using opposite Golden Agri-Resources and Alico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, Alico 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 Alico will offset losses from the drop in Alico's long position.| Golden Agri-Resources vs. Global Clean Energy | Golden Agri-Resources vs. Edible Garden AG | Golden Agri-Resources vs. Local Bounti Corp | Golden Agri-Resources 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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