Correlation Between Simply Good and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Simply Good and Adecoagro 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 Adecoagro 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 Adecoagro SA, you can compare the effects of market volatilities on Simply Good and Adecoagro 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 Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simply Good and Adecoagro.
Diversification Opportunities for Simply Good and Adecoagro
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Simply and Adecoagro is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Simply Good Foods and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA 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 Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Simply Good i.e., Simply Good and Adecoagro go up and down completely randomly.
Pair Corralation between Simply Good and Adecoagro
Given the investment horizon of 90 days Simply Good Foods is expected to generate 0.89 times more return on investment than Adecoagro. However, Simply Good Foods is 1.12 times less risky than Adecoagro. It trades about 0.25 of its potential returns per unit of risk. Adecoagro SA is currently generating about 0.04 per unit of risk. If you would invest 3,178 in Simply Good Foods on August 28, 2024 and sell it today you would earn a total of 806.00 from holding Simply Good Foods or generate 25.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simply Good Foods vs. Adecoagro SA
Performance |
| Timeline |
| Simply Good Foods |
| Adecoagro SA |
Simply Good and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simply Good and Adecoagro
The main advantage of trading using opposite Simply Good and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simply Good position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro'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 |
| Adecoagro vs. Bellring Brands LLC | Adecoagro vs. Ingredion Incorporated | Adecoagro vs. Nomad Foods | Adecoagro vs. Simply Good Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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