Correlation Between GVS SPA and AGRICULTBK HADR/25

Can any of the company-specific risk be diversified away by investing in both GVS SPA and AGRICULTBK HADR/25 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 GVS SPA and AGRICULTBK HADR/25 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GVS SPA and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on GVS SPA and AGRICULTBK HADR/25 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 GVS SPA with a short position of AGRICULTBK HADR/25. Check out your portfolio center. Please also check ongoing floating volatility patterns of GVS SPA and AGRICULTBK HADR/25.

Diversification Opportunities for GVS SPA and AGRICULTBK HADR/25

-0.8

Correlation Coefficient

GVS SPA  AGRICULTBK HADR/25

Pay attention - limited upside

The 3 months correlation between GVS and AGRICULTBK is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding GVS SPA and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR/25 and GVS SPA 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 GVS SPA are associated (or correlated) with AGRICULTBK HADR/25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR/25 has no effect on the direction of GVS SPA i.e., GVS SPA and AGRICULTBK HADR/25 go up and down completely randomly.

Pair Corralation between GVS SPA and AGRICULTBK HADR/25

Assuming the 90 days horizon GVS SPA is expected to under-perform the AGRICULTBK HADR/25. But the stock apears to be less risky and, when comparing its historical volatility, GVS SPA is 1.49 times less risky than AGRICULTBK HADR/25. The stock trades about -0.03 of its potential returns per unit of risk. The AGRICULTBK HADR25 YC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,229  in AGRICULTBK HADR25 YC on October 23, 2024 and sell it today you would earn a total of  31.00  from holding AGRICULTBK HADR25 YC or generate 2.52% return on investment over 90 days.

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

GVS SPA  vs.  AGRICULTBK HADR25 YC

GVS SPA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GVS SPA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AGRICULTBK HADR/25

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGRICULTBK HADR25 YC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGRICULTBK HADR/25 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GVS SPA and AGRICULTBK HADR/25

The main advantage of trading using opposite GVS SPA and AGRICULTBK HADR/25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GVS SPA position performs unexpectedly, AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 will offset losses from the drop in AGRICULTBK HADR/25's long position.

The idea behind GVS SPA and AGRICULTBK HADR25 YC 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.