Correlation Between Richards Packaging and Ag Growth
Can any of the company-specific risk be diversified away by investing in both Richards Packaging and Ag Growth 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 Richards Packaging and Ag Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richards Packaging Income and Ag Growth International, you can compare the effects of market volatilities on Richards Packaging and Ag Growth 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 Richards Packaging with a short position of Ag Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richards Packaging and Ag Growth.
Diversification Opportunities for Richards Packaging and Ag Growth
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Richards and AFN is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Richards Packaging Income and Ag Growth International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ag Growth International and Richards Packaging 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 Richards Packaging Income are associated (or correlated) with Ag Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ag Growth International has no effect on the direction of Richards Packaging i.e., Richards Packaging and Ag Growth go up and down completely randomly.
Pair Corralation between Richards Packaging and Ag Growth
Assuming the 90 days trading horizon Richards Packaging is expected to generate 4.31 times less return on investment than Ag Growth. But when comparing it to its historical volatility, Richards Packaging Income is 1.29 times less risky than Ag Growth. It trades about 0.01 of its potential returns per unit of risk. Ag Growth International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,082 in Ag Growth International on August 28, 2024 and sell it today you would earn a total of 259.00 from holding Ag Growth International or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richards Packaging Income vs. Ag Growth International
Performance |
| Timeline |
| Richards Packaging Income |
| Ag Growth International |
Richards Packaging and Ag Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richards Packaging and Ag Growth
The main advantage of trading using opposite Richards Packaging and Ag Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richards Packaging position performs unexpectedly, Ag Growth 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 Ag Growth will offset losses from the drop in Ag Growth's long position.| Richards Packaging vs. K Bro Linen | Richards Packaging vs. The Keg Royalties | Richards Packaging vs. Pollard Banknote Limited | Richards Packaging vs. SIR Royalty Income |
| Ag Growth vs. Exchange Income | Ag Growth vs. Stella Jones | Ag Growth vs. Superior Plus Corp | Ag Growth vs. NFI 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |