Correlation Between Real Good and AgriFORCE Growing
Can any of the company-specific risk be diversified away by investing in both Real Good 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 Real Good and AgriFORCE Growing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and AgriFORCE Growing Systems, you can compare the effects of market volatilities on Real Good 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 Real Good with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and AgriFORCE Growing.
Diversification Opportunities for Real Good and AgriFORCE Growing
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Real and AgriFORCE is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food 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 Real Good 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 Real Good Food 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 Real Good i.e., Real Good and AgriFORCE Growing go up and down completely randomly.
Pair Corralation between Real Good and AgriFORCE Growing
Considering the 90-day investment horizon Real Good Food is expected to under-perform the AgriFORCE Growing. But the stock apears to be less risky and, when comparing its historical volatility, Real Good Food is 1.34 times less risky than AgriFORCE Growing. The stock trades about -0.18 of its potential returns per unit of risk. The AgriFORCE Growing Systems is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 5.06 in AgriFORCE Growing Systems on August 31, 2024 and sell it today you would lose (1.49) from holding AgriFORCE Growing Systems or give up 29.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Good Food vs. AgriFORCE Growing Systems
Performance |
| Timeline |
| Real Good Food |
| AgriFORCE Growing Systems |
Real Good and AgriFORCE Growing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and AgriFORCE Growing
The main advantage of trading using opposite Real Good and AgriFORCE Growing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good 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.| Real Good vs. Seneca Foods Corp | Real Good vs. Central Garden Pet | Real Good vs. Central Garden Pet | Real Good vs. Natures Sunshine Products |
| AgriFORCE Growing vs. Limoneira Co | AgriFORCE Growing vs. Forafric Global PLC | AgriFORCE Growing vs. Australian Agricultural | AgriFORCE Growing vs. NaturalShrimp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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