Correlation Between Astra Agro and AgriFORCE Growing

Can any of the company-specific risk be diversified away by investing in both Astra Agro and AgriFORCE Growing 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 Astra Agro and AgriFORCE Growing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astra Agro Lestari and AgriFORCE Growing Systems, you can compare the effects of market volatilities on Astra Agro and AgriFORCE Growing 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 Astra Agro with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and AgriFORCE Growing.

Diversification Opportunities for Astra Agro and AgriFORCE Growing

0.0

Correlation Coefficient

Astra Agro  AgriFORCE Growing

Pay attention - limited upside

The 3 months correlation between Astra and AgriFORCE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and AgriFORCE Growing Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriFORCE Growing Systems and Astra Agro 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 Astra Agro Lestari are associated (or correlated) with AgriFORCE Growing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriFORCE Growing Systems has no effect on the direction of Astra Agro i.e., Astra Agro and AgriFORCE Growing go up and down completely randomly.

Pair Corralation between Astra Agro and AgriFORCE Growing

If you would invest (100.00) in AgriFORCE Growing Systems on December 27, 2024 and sell it today you would earn a total of  100.00  from holding AgriFORCE Growing Systems or generate -100.0% return on investment over 90 days.

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

Astra Agro Lestari  vs.  AgriFORCE Growing Systems

Astra Agro Lestari

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astra Agro Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Astra Agro is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

AgriFORCE Growing Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days AgriFORCE Growing Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, AgriFORCE Growing is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Astra Agro and AgriFORCE Growing

The main advantage of trading using opposite Astra Agro and AgriFORCE Growing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, AgriFORCE Growing 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 AgriFORCE Growing will offset losses from the drop in AgriFORCE Growing's long position.

The idea behind Astra Agro Lestari and AgriFORCE Growing Systems 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.