Correlation Between Forafric Global and Minerva SA

Can any of the company-specific risk be diversified away by investing in both Forafric Global and Minerva SA 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 Minerva SA 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 Minerva SA, you can compare the effects of market volatilities on Forafric Global and Minerva SA 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 Minerva SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and Minerva SA.

Diversification Opportunities for Forafric Global and Minerva SA

0.0

Correlation Coefficient

Forafric Global  Minerva SA

Pay attention - limited upside

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

Pair Corralation between Forafric Global and Minerva SA

Assuming the 90 days horizon Forafric Global PLC is expected to under-perform the Minerva SA. In addition to that, Forafric Global is 3.24 times more volatile than Minerva SA. It trades about -0.05 of its total potential returns per unit of risk. Minerva SA is currently generating about -0.09 per unit of volatility. If you would invest  450.00  in Minerva SA on September 12, 2024 and sell it today you would lose (61.00) from holding Minerva SA or give up 13.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Forafric Global PLC  vs.  Minerva SA

Forafric Global PLC

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Forafric Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Minerva SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minerva SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Forafric Global and Minerva SA

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

The idea behind Forafric Global PLC and Minerva 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.