Correlation Between Global Clean and Golden Agri-Resources
Can any of the company-specific risk be diversified away by investing in both Global Clean and Golden Agri-Resources 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 Global Clean and Golden Agri-Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Clean Energy and Golden Agri Resources, you can compare the effects of market volatilities on Global Clean and Golden Agri-Resources 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 Global Clean with a short position of Golden Agri-Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Clean and Golden Agri-Resources.
Diversification Opportunities for Global Clean and Golden Agri-Resources
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Golden is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Global Clean Energy and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources and Global Clean 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 Global Clean Energy are associated (or correlated) with Golden Agri-Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Global Clean i.e., Global Clean and Golden Agri-Resources go up and down completely randomly.
Pair Corralation between Global Clean and Golden Agri-Resources
Given the investment horizon of 90 days Global Clean Energy is expected to under-perform the Golden Agri-Resources. In addition to that, Global Clean is 1.0 times more volatile than Golden Agri Resources. It trades about -0.21 of its total potential returns per unit of risk. Golden Agri Resources is currently generating about 0.24 per unit of volatility. If you would invest 18.00 in Golden Agri Resources on November 6, 2024 and sell it today you would earn a total of 5.00 from holding Golden Agri Resources or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Global Clean Energy vs. Golden Agri Resources
Performance |
| Timeline |
| Global Clean Energy |
| Golden Agri Resources |
Global Clean and Golden Agri-Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Clean and Golden Agri-Resources
The main advantage of trading using opposite Global Clean and Golden Agri-Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Clean position performs unexpectedly, Golden Agri-Resources 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 Golden Agri-Resources will offset losses from the drop in Golden Agri-Resources' long position.| Global Clean vs. Edible Garden AG | Global Clean vs. Golden Agri Resources | Global Clean vs. Local Bounti Corp | Global Clean vs. Village Farms International |
| 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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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