Correlation Between Mammoth Energy and Agro Capital
Can any of the company-specific risk be diversified away by investing in both Mammoth Energy and Agro Capital 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 Mammoth Energy and Agro Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mammoth Energy Services and Agro Capital Management, you can compare the effects of market volatilities on Mammoth Energy and Agro Capital 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 Mammoth Energy with a short position of Agro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mammoth Energy and Agro Capital.
Diversification Opportunities for Mammoth Energy and Agro Capital
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mammoth and Agro is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mammoth Energy Services and Agro Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Capital Management and Mammoth Energy 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 Mammoth Energy Services are associated (or correlated) with Agro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Capital Management has no effect on the direction of Mammoth Energy i.e., Mammoth Energy and Agro Capital go up and down completely randomly.
Pair Corralation between Mammoth Energy and Agro Capital
Given the investment horizon of 90 days Mammoth Energy Services is expected to under-perform the Agro Capital. But the stock apears to be less risky and, when comparing its historical volatility, Mammoth Energy Services is 5.97 times less risky than Agro Capital. The stock trades about -0.21 of its potential returns per unit of risk. The Agro Capital Management is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Agro Capital Management on November 18, 2024 and sell it today you would lose (1.04) from holding Agro Capital Management or give up 17.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mammoth Energy Services vs. Agro Capital Management
Performance |
| Timeline |
| Mammoth Energy Services |
| Agro Capital Management |
Mammoth Energy and Agro Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mammoth Energy and Agro Capital
The main advantage of trading using opposite Mammoth Energy and Agro Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mammoth Energy position performs unexpectedly, Agro Capital 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 Agro Capital will offset losses from the drop in Agro Capital's long position.| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified Holdings |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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