Correlation Between Forafric Global and SLC Agricola

Can any of the company-specific risk be diversified away by investing in both Forafric Global and SLC Agricola 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 Forafric Global and SLC Agricola into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Forafric Global PLC and SLC Agricola SA, you can compare the effects of market volatilities on Forafric Global and SLC Agricola 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 Forafric Global with a short position of SLC Agricola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and SLC Agricola.

Diversification Opportunities for Forafric Global and SLC Agricola

-0.05

Correlation Coefficient

Forafric Global  SLC Agricola

Good diversification

The 3 months correlation between Forafric and SLC is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and SLC Agricola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLC Agricola SA and Forafric Global 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 Forafric Global PLC are associated (or correlated) with SLC Agricola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLC Agricola SA has no effect on the direction of Forafric Global i.e., Forafric Global and SLC Agricola go up and down completely randomly.

Pair Corralation between Forafric Global and SLC Agricola

Given the investment horizon of 90 days Forafric Global PLC is expected to generate 0.41 times more return on investment than SLC Agricola. However, Forafric Global PLC is 2.44 times less risky than SLC Agricola. It trades about 0.02 of its potential returns per unit of risk. SLC Agricola SA is currently generating about -0.08 per unit of risk. If you would invest  1,020  in Forafric Global PLC on October 5, 2024 and sell it today you would earn a total of  5.00  from holding Forafric Global PLC or generate 0.49% return on investment over 90 days.

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

Forafric Global PLC  vs.  SLC Agricola SA

Forafric Global PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forafric Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Forafric Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

SLC Agricola SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SLC Agricola SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Forafric Global and SLC Agricola

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

The idea behind Forafric Global PLC and SLC Agricola SA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..