Correlation Between Adler Group and Agritek Holdings

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

By analyzing existing cross correlation between Adler Group SA and Agritek Holdings, you can compare the effects of market volatilities on Adler Group and Agritek 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 Adler Group with a short position of Agritek Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adler Group and Agritek Holdings.

Diversification Opportunities for Adler Group and Agritek Holdings

0.0

Correlation Coefficient

Adler Group  Agritek Holdings

Pay attention - limited upside

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

Pair Corralation between Adler Group and Agritek Holdings

If you would invest  0.01  in Agritek Holdings on December 29, 2024 and sell it today you would earn a total of  0.00  from holding Agritek Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	42.62%
Values	Daily Returns

Adler Group SA  vs.  Agritek Holdings

Adler Group SA

Risk-Adjusted Performance

Very Weak

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

Agritek Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agritek Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Agritek Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Adler Group and Agritek Holdings

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

The idea behind Adler Group SA and Agritek Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.