Correlation Between GrainCorp and Fresh Del
Can any of the company-specific risk be diversified away by investing in both GrainCorp and Fresh Del 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 Fresh Del into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrainCorp Limited and Fresh Del Monte, you can compare the effects of market volatilities on GrainCorp and Fresh Del 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 Fresh Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrainCorp and Fresh Del.
Diversification Opportunities for GrainCorp and Fresh Del
Very good diversification
The 3 months correlation between GrainCorp and Fresh is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GrainCorp Limited and Fresh Del Monte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Del Monte 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 Fresh Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Del Monte has no effect on the direction of GrainCorp i.e., GrainCorp and Fresh Del go up and down completely randomly.
Pair Corralation between GrainCorp and Fresh Del
Assuming the 90 days horizon GrainCorp Limited is expected to generate 2.83 times more return on investment than Fresh Del. However, GrainCorp is 2.83 times more volatile than Fresh Del Monte. It trades about 0.02 of its potential returns per unit of risk. Fresh Del Monte is currently generating about -0.27 per unit of risk. If you would invest 459.00 in GrainCorp Limited on October 26, 2024 and sell it today you would earn a total of 0.00 from holding GrainCorp Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
GrainCorp Limited vs. Fresh Del Monte
Performance |
| Timeline |
| GrainCorp Limited |
| Fresh Del Monte |
GrainCorp and Fresh Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrainCorp and Fresh Del
The main advantage of trading using opposite GrainCorp and Fresh Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrainCorp position performs unexpectedly, Fresh Del 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 Fresh Del will offset losses from the drop in Fresh Del's long position.| GrainCorp vs. Australian Agricultural | GrainCorp vs. Forafric Global PLC | GrainCorp vs. Forafric Global PLC |
| Fresh Del vs. Alico Inc | Fresh Del vs. SW Seed Company | Fresh Del vs. Adecoagro SA | Fresh Del vs. Brasilagro Adr |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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