Correlation Between Great Lakes and Agrify Corp
Can any of the company-specific risk be diversified away by investing in both Great Lakes and Agrify Corp 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 Great Lakes and Agrify Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Lakes Dredge and Agrify Corp, you can compare the effects of market volatilities on Great Lakes and Agrify Corp 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 Great Lakes with a short position of Agrify Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Lakes and Agrify Corp.
Diversification Opportunities for Great Lakes and Agrify Corp
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Great and Agrify is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Dredge and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and Great Lakes 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 Great Lakes Dredge are associated (or correlated) with Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of Great Lakes i.e., Great Lakes and Agrify Corp go up and down completely randomly.
Pair Corralation between Great Lakes and Agrify Corp
Given the investment horizon of 90 days Great Lakes Dredge is expected to under-perform the Agrify Corp. But the stock apears to be less risky and, when comparing its historical volatility, Great Lakes Dredge is 9.11 times less risky than Agrify Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Agrify Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 362.00 in Agrify Corp on October 22, 2024 and sell it today you would earn a total of 2,253 from holding Agrify Corp or generate 622.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Lakes Dredge vs. Agrify Corp
Performance |
| Timeline |
| Great Lakes Dredge |
| Agrify Corp |
Great Lakes and Agrify Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Lakes and Agrify Corp
The main advantage of trading using opposite Great Lakes and Agrify Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Lakes position performs unexpectedly, Agrify Corp 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 Agrify Corp will offset losses from the drop in Agrify Corp's long position.| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
| Agrify Corp vs. MYR Group | Agrify Corp vs. Granite Construction Incorporated | Agrify Corp vs. Construction Partners | Agrify Corp vs. Great Lakes Dredge |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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