Correlation Between Construction Partners and Agrify Corp
Can any of the company-specific risk be diversified away by investing in both Construction Partners 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 Construction Partners and Agrify Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Construction Partners and Agrify Corp, you can compare the effects of market volatilities on Construction Partners 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 Construction Partners with a short position of Agrify Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Construction Partners and Agrify Corp.
Diversification Opportunities for Construction Partners and Agrify Corp
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Construction and Agrify is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Construction Partners and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and Construction Partners 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 Construction Partners 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 Construction Partners i.e., Construction Partners and Agrify Corp go up and down completely randomly.
Pair Corralation between Construction Partners and Agrify Corp
Given the investment horizon of 90 days Construction Partners is expected to generate 0.22 times more return on investment than Agrify Corp. However, Construction Partners is 4.46 times less risky than Agrify Corp. It trades about 0.11 of its potential returns per unit of risk. Agrify Corp is currently generating about 0.02 per unit of risk. If you would invest 2,727 in Construction Partners on August 28, 2024 and sell it today you would earn a total of 7,401 from holding Construction Partners or generate 271.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Construction Partners vs. Agrify Corp
Performance |
| Timeline |
| Construction Partners |
| Agrify Corp |
Construction Partners and Agrify Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Construction Partners and Agrify Corp
The main advantage of trading using opposite Construction Partners and Agrify Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Construction Partners 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.| Construction Partners vs. MYR Group | Construction Partners vs. Granite Construction Incorporated | Construction Partners vs. Tutor Perini | Construction Partners vs. Sterling Construction |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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