Correlation Between SLC Agricola and Golden Agri
Can any of the company-specific risk be diversified away by investing in both SLC Agricola and Golden Agri 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 SLC Agricola and Golden Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLC Agricola SA and Golden Agri Resources, you can compare the effects of market volatilities on SLC Agricola and Golden Agri 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 SLC Agricola with a short position of Golden Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agricola and Golden Agri.
Diversification Opportunities for SLC Agricola and Golden Agri
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between SLC and Golden is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agricola SA and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources and SLC Agricola 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 SLC Agricola SA are associated (or correlated) with Golden Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of SLC Agricola i.e., SLC Agricola and Golden Agri go up and down completely randomly.
Pair Corralation between SLC Agricola and Golden Agri
Assuming the 90 days horizon SLC Agricola SA is expected to generate 1.1 times more return on investment than Golden Agri. However, SLC Agricola is 1.1 times more volatile than Golden Agri Resources. It trades about -0.13 of its potential returns per unit of risk. Golden Agri Resources is currently generating about -0.31 per unit of risk. If you would invest 301.00 in SLC Agricola SA on August 29, 2024 and sell it today you would lose (13.00) from holding SLC Agricola SA or give up 4.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLC Agricola SA vs. Golden Agri Resources
Performance |
| Timeline |
| SLC Agricola SA |
| Golden Agri Resources |
SLC Agricola and Golden Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLC Agricola and Golden Agri
The main advantage of trading using opposite SLC Agricola and Golden Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agricola position performs unexpectedly, Golden Agri 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 Golden Agri will offset losses from the drop in Golden Agri's long position.| SLC Agricola vs. Golden Agri Resources | SLC Agricola vs. Wilmar International | SLC Agricola vs. Brasilagro Adr | SLC Agricola vs. Alico Inc |
| Golden Agri vs. Avi Ltd ADR | Golden Agri vs. Altavoz Entertainment | Golden Agri vs. Aryzta AG PK | Golden Agri vs. Artisan Consumer Goods |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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