Correlation Between Southland Holdings and Agrify Corp
Can any of the company-specific risk be diversified away by investing in both Southland Holdings 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 Southland Holdings and Agrify Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southland Holdings and Agrify Corp, you can compare the effects of market volatilities on Southland Holdings 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 Southland Holdings with a short position of Agrify Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and Agrify Corp.
Diversification Opportunities for Southland Holdings and Agrify Corp
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Southland and Agrify is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and Southland Holdings 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 Southland Holdings 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 Southland Holdings i.e., Southland Holdings and Agrify Corp go up and down completely randomly.
Pair Corralation between Southland Holdings and Agrify Corp
Given the investment horizon of 90 days Southland Holdings is expected to generate 0.53 times more return on investment than Agrify Corp. However, Southland Holdings is 1.88 times less risky than Agrify Corp. It trades about -0.13 of its potential returns per unit of risk. Agrify Corp is currently generating about -0.21 per unit of risk. If you would invest 337.00 in Southland Holdings on November 3, 2024 and sell it today you would lose (32.00) from holding Southland Holdings or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. Agrify Corp
Performance |
| Timeline |
| Southland Holdings |
| Agrify Corp |
Southland Holdings and Agrify Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southland Holdings and Agrify Corp
The main advantage of trading using opposite Southland Holdings and Agrify Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings 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.| Southland Holdings vs. Fluent Inc | Southland Holdings vs. Jacobs Solutions | Southland Holdings vs. 51Talk Online Education | Southland Holdings vs. Highway Holdings Limited |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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