Correlation Between Golden Agri-Resources and Pond Technologies
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Pond Technologies 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 Pond Technologies 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 Pond Technologies Holdings, you can compare the effects of market volatilities on Golden Agri-Resources and Pond Technologies 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 Pond Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Pond Technologies.
Diversification Opportunities for Golden Agri-Resources and Pond Technologies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Golden and Pond is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Pond Technologies Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pond Technologies 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 Pond Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pond Technologies has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Pond Technologies go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and Pond Technologies
Assuming the 90 days horizon Golden Agri Resources is expected to under-perform the Pond Technologies. But the pink sheet apears to be less risky and, when comparing its historical volatility, Golden Agri Resources is 9.09 times less risky than Pond Technologies. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Pond Technologies Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1.05 in Pond Technologies Holdings on November 29, 2024 and sell it today you would lose (0.05) from holding Pond Technologies Holdings or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Golden Agri Resources vs. Pond Technologies Holdings
Performance |
| Timeline |
| Golden Agri Resources |
| Pond Technologies |
Golden Agri-Resources and Pond Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Agri-Resources and Pond Technologies
The main advantage of trading using opposite Golden Agri-Resources and Pond Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, Pond Technologies 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 Pond Technologies will offset losses from the drop in Pond Technologies' 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 |
| Pond Technologies vs. Golden Agri Resources | Pond Technologies vs. Global Clean Energy | Pond Technologies vs. Edible Garden AG | Pond Technologies vs. Local Bounti Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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