Correlation Between 2S Metal and Agripure Holdings

Can any of the company-specific risk be diversified away by investing in both 2S Metal and Agripure Holdings 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 2S Metal and Agripure Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2S Metal Public and Agripure Holdings Public, you can compare the effects of market volatilities on 2S Metal and Agripure Holdings 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 2S Metal with a short position of Agripure Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Agripure Holdings.

Diversification Opportunities for 2S Metal and Agripure Holdings

0.82

Correlation Coefficient

2S Metal  Agripure Holdings

Very poor diversification

The 3 months correlation between 2S Metal and Agripure is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Agripure Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripure Holdings Public and 2S Metal 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 2S Metal Public are associated (or correlated) with Agripure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripure Holdings Public has no effect on the direction of 2S Metal i.e., 2S Metal and Agripure Holdings go up and down completely randomly.

Pair Corralation between 2S Metal and Agripure Holdings

Assuming the 90 days horizon 2S Metal Public is expected to under-perform the Agripure Holdings. But the stock apears to be less risky and, when comparing its historical volatility, 2S Metal Public is 1.52 times less risky than Agripure Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Agripure Holdings Public is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  404.00  in Agripure Holdings Public on October 10, 2024 and sell it today you would earn a total of  10.00  from holding Agripure Holdings Public or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

2S Metal Public  vs.  Agripure Holdings Public

2S Metal Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 2S Metal Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Agripure Holdings Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agripure Holdings Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Agripure Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 2S Metal and Agripure Holdings

The main advantage of trading using opposite 2S Metal and Agripure Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Agripure Holdings 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 Agripure Holdings will offset losses from the drop in Agripure Holdings' long position.

The idea behind 2S Metal Public and Agripure Holdings Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.