Correlation Between Agrometal SAI and Grimoldi

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

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

Diversification Opportunities for Agrometal SAI and Grimoldi

0.26

Correlation Coefficient

Agrometal SAI  Grimoldi

Modest diversification

The 3 months correlation between Agrometal and Grimoldi is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Grimoldi SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grimoldi SA and Agrometal SAI 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 Agrometal SAI are associated (or correlated) with Grimoldi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grimoldi SA has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Grimoldi go up and down completely randomly.

Pair Corralation between Agrometal SAI and Grimoldi

Assuming the 90 days trading horizon Agrometal SAI is expected to under-perform the Grimoldi. In addition to that, Agrometal SAI is 1.05 times more volatile than Grimoldi SA. It trades about -0.11 of its total potential returns per unit of risk. Grimoldi SA is currently generating about 0.05 per unit of volatility. If you would invest  131,500  in Grimoldi SA on December 24, 2024 and sell it today you would earn a total of  10,000  from holding Grimoldi SA or generate 7.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Agrometal SAI  vs.  Grimoldi SA

Agrometal SAI

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agrometal SAI 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 somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Grimoldi SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grimoldi SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grimoldi may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Agrometal SAI and Grimoldi

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

The idea behind Agrometal SAI and Grimoldi 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.