Correlation Between AgriFORCE Growing and GrainCorp

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

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

Diversification Opportunities for AgriFORCE Growing and GrainCorp

0.0

Correlation Coefficient

AgriFORCE Growing  GrainCorp

Pay attention - limited upside

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

Pair Corralation between AgriFORCE Growing and GrainCorp

If you would invest (100.00) in AgriFORCE Growing Systems on December 30, 2024 and sell it today you would earn a total of  100.00  from holding AgriFORCE Growing Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AgriFORCE Growing Systems  vs.  GrainCorp Limited

AgriFORCE Growing Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days AgriFORCE Growing Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, AgriFORCE Growing is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

GrainCorp Limited

Risk-Adjusted Performance

Very Weak

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

Pair Trading with AgriFORCE Growing and GrainCorp

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

The idea behind AgriFORCE Growing Systems and GrainCorp Limited 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.