Correlation Between Agronomics and Blackhawk Growth

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

By analyzing existing cross correlation between Agronomics Limited and Blackhawk Growth Corp, you can compare the effects of market volatilities on Agronomics and Blackhawk Growth 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 Agronomics with a short position of Blackhawk Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agronomics and Blackhawk Growth.

Diversification Opportunities for Agronomics and Blackhawk Growth

0.72

Correlation Coefficient

Agronomics  Blackhawk Growth

Poor diversification

The 3 months correlation between Agronomics and Blackhawk is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Agronomics Limited and Blackhawk Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackhawk Growth Corp and Agronomics 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 Agronomics Limited are associated (or correlated) with Blackhawk Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackhawk Growth Corp has no effect on the direction of Agronomics i.e., Agronomics and Blackhawk Growth go up and down completely randomly.

Pair Corralation between Agronomics and Blackhawk Growth

Assuming the 90 days horizon Agronomics Limited is expected to under-perform the Blackhawk Growth. But the pink sheet apears to be less risky and, when comparing its historical volatility, Agronomics Limited is 7.07 times less risky than Blackhawk Growth. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Blackhawk Growth Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7.83  in Blackhawk Growth Corp on August 31, 2024 and sell it today you would lose (7.77) from holding Blackhawk Growth Corp or give up 99.23% of portfolio value over 90 days.

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

Agronomics Limited  vs.  Blackhawk Growth Corp

Agronomics Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agronomics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Blackhawk Growth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackhawk Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Agronomics and Blackhawk Growth

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

The idea behind Agronomics Limited and Blackhawk Growth Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.