Correlation Between Simply Good and AgriFORCE Growing
Can any of the company-specific risk be diversified away by investing in both Simply 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 Simply 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 Simply Good Foods and AgriFORCE Growing Systems, you can compare the effects of market volatilities on Simply 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 Simply Good with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simply Good and AgriFORCE Growing.
Diversification Opportunities for Simply Good and AgriFORCE Growing
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simply and AgriFORCE is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Simply Good Foods 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 Simply 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 Simply Good Foods 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 Simply Good i.e., Simply Good and AgriFORCE Growing go up and down completely randomly.
Pair Corralation between Simply Good and AgriFORCE Growing
Given the investment horizon of 90 days Simply Good Foods is expected to generate 0.32 times more return on investment than AgriFORCE Growing. However, Simply Good Foods is 3.13 times less risky than AgriFORCE Growing. It trades about 0.53 of its potential returns per unit of risk. AgriFORCE Growing Systems is currently generating about -0.46 per unit of risk. If you would invest 3,377 in Simply Good Foods on August 30, 2024 and sell it today you would earn a total of 615.00 from holding Simply Good Foods or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simply Good Foods vs. AgriFORCE Growing Systems
Performance |
| Timeline |
| Simply Good Foods |
| AgriFORCE Growing Systems |
Simply Good and AgriFORCE Growing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simply Good and AgriFORCE Growing
The main advantage of trading using opposite Simply Good and AgriFORCE Growing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simply 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.| Simply Good vs. Post Holdings | Simply Good vs. Treehouse Foods | Simply Good vs. J J Snack | Simply Good vs. Central Garden Pet |
| AgriFORCE Growing vs. Bunge Limited | AgriFORCE Growing vs. Cal Maine Foods | AgriFORCE Growing vs. Dole PLC | AgriFORCE Growing vs. Adecoagro SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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