Correlation Between Gemfields Group and AGRICULTBK HADR/25

Can any of the company-specific risk be diversified away by investing in both Gemfields Group 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 Gemfields Group 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 Gemfields Group Limited and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on Gemfields Group 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 Gemfields Group with a short position of AGRICULTBK HADR/25. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gemfields Group and AGRICULTBK HADR/25.

Diversification Opportunities for Gemfields Group and AGRICULTBK HADR/25

-0.33

Correlation Coefficient

Gemfields Group  AGRICULTBK HADR/25

Very good diversification

The 3 months correlation between Gemfields and AGRICULTBK is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gemfields Group Limited 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 Gemfields Group 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 Gemfields Group Limited 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 Gemfields Group i.e., Gemfields Group and AGRICULTBK HADR/25 go up and down completely randomly.

Pair Corralation between Gemfields Group and AGRICULTBK HADR/25

Assuming the 90 days horizon Gemfields Group is expected to generate 2.39 times less return on investment than AGRICULTBK HADR/25. In addition to that, Gemfields Group is 5.72 times more volatile than AGRICULTBK HADR25 YC. It trades about 0.01 of its total potential returns per unit of risk. AGRICULTBK HADR25 YC is currently generating about 0.11 per unit of volatility. If you would invest  1,278  in AGRICULTBK HADR25 YC on December 25, 2024 and sell it today you would earn a total of  142.00  from holding AGRICULTBK HADR25 YC or generate 11.11% return on investment over 90 days.

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

Gemfields Group Limited  vs.  AGRICULTBK HADR25 YC

Gemfields Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gemfields Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gemfields Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AGRICULTBK HADR/25

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AGRICULTBK HADR25 YC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGRICULTBK HADR/25 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gemfields Group and AGRICULTBK HADR/25

The main advantage of trading using opposite Gemfields Group and AGRICULTBK HADR/25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gemfields Group 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 Gemfields Group Limited 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.