Correlation Between Forafric Global and SW Seed

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

Diversification Opportunities for Forafric Global and SW Seed

0.13

Correlation Coefficient

Forafric Global  SW Seed

Average diversification

The 3 months correlation between Forafric and SANW is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and SW Seed Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SW Seed Company 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 SW Seed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SW Seed Company has no effect on the direction of Forafric Global i.e., Forafric Global and SW Seed go up and down completely randomly.

Pair Corralation between Forafric Global and SW Seed

Assuming the 90 days horizon Forafric Global PLC is expected to under-perform the SW Seed. In addition to that, Forafric Global is 1.59 times more volatile than SW Seed Company. It trades about -0.09 of its total potential returns per unit of risk. SW Seed Company is currently generating about -0.03 per unit of volatility. If you would invest  843.00  in SW Seed Company on December 29, 2024 and sell it today you would lose (158.00) from holding SW Seed Company or give up 18.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.16%
Values	Daily Returns

Forafric Global PLC  vs.  SW Seed Company

Forafric Global PLC

Risk-Adjusted Performance

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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

SW Seed Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days SW Seed Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Forafric Global and SW Seed

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

The idea behind Forafric Global PLC and SW Seed Company 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.