Correlation Between GrainCorp and AgriFORCE Growing
Can any of the company-specific risk be diversified away by investing in both GrainCorp and AgriFORCE Growing 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 GrainCorp and AgriFORCE Growing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrainCorp Limited and AgriFORCE Growing Systems, you can compare the effects of market volatilities on GrainCorp and AgriFORCE Growing 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 GrainCorp with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrainCorp and AgriFORCE Growing.
Diversification Opportunities for GrainCorp and AgriFORCE Growing
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GrainCorp and AgriFORCE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GrainCorp Limited and AgriFORCE Growing Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriFORCE Growing Systems and GrainCorp 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 GrainCorp Limited are associated (or correlated) with AgriFORCE Growing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriFORCE Growing Systems has no effect on the direction of GrainCorp i.e., GrainCorp and AgriFORCE Growing go up and down completely randomly.
Pair Corralation between GrainCorp and AgriFORCE Growing
If you would invest 0.44 in AgriFORCE Growing Systems on August 27, 2024 and sell it today you would earn a total of 0.00 from holding AgriFORCE Growing Systems or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
GrainCorp Limited vs. AgriFORCE Growing Systems
Performance |
| Timeline |
| GrainCorp Limited |
| AgriFORCE Growing Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GrainCorp and AgriFORCE Growing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrainCorp and AgriFORCE Growing
The main advantage of trading using opposite GrainCorp and AgriFORCE Growing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrainCorp position performs unexpectedly, AgriFORCE Growing 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 AgriFORCE Growing will offset losses from the drop in AgriFORCE Growing's long position.| GrainCorp vs. Avi Ltd ADR | GrainCorp vs. Altavoz Entertainment | GrainCorp vs. Aryzta AG PK | GrainCorp vs. Artisan Consumer Goods |
| AgriFORCE Growing vs. AgriFORCE Growing Systems | AgriFORCE Growing vs. Hycroft Mining Holding | AgriFORCE Growing vs. Digital Brands Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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