Correlation Between US Global and African Agriculture
Can any of the company-specific risk be diversified away by investing in both US Global and African Agriculture 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 US Global and African Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and African Agriculture Holdings, you can compare the effects of market volatilities on US Global and African Agriculture 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 US Global with a short position of African Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and African Agriculture.
Diversification Opportunities for US Global and African Agriculture
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GROW and African is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and African Agriculture Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Agriculture and US Global 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 US Global Investors are associated (or correlated) with African Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Agriculture has no effect on the direction of US Global i.e., US Global and African Agriculture go up and down completely randomly.
Pair Corralation between US Global and African Agriculture
If you would invest 243.00 in US Global Investors on September 13, 2024 and sell it today you would earn a total of 0.00 from holding US Global Investors or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 2.33% |
| Values | Daily Returns |
US Global Investors vs. African Agriculture Holdings
Performance |
| Timeline |
| US Global Investors |
| African Agriculture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
US Global and African Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and African Agriculture
The main advantage of trading using opposite US Global and African Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, African Agriculture 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 African Agriculture will offset losses from the drop in African Agriculture's long position.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| African Agriculture vs. Capital Clean Energy | African Agriculture vs. PennantPark Investment | African Agriculture vs. US Global Investors | African Agriculture vs. Royalty Management Holding |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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