Correlation Between Agripower France and Moulinvest

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

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

Diversification Opportunities for Agripower France and Moulinvest

0.73

Correlation Coefficient

Agripower France  Moulinvest

Poor diversification

The 3 months correlation between Agripower and Moulinvest is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Agripower France Sa and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest and Agripower France 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 Agripower France Sa are associated (or correlated) with Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Agripower France i.e., Agripower France and Moulinvest go up and down completely randomly.

Pair Corralation between Agripower France and Moulinvest

Assuming the 90 days trading horizon Agripower France Sa is expected to generate 1.57 times more return on investment than Moulinvest. However, Agripower France is 1.57 times more volatile than Moulinvest. It trades about 0.12 of its potential returns per unit of risk. Moulinvest is currently generating about 0.15 per unit of risk. If you would invest  89.00  in Agripower France Sa on December 1, 2024 and sell it today you would earn a total of  28.00  from holding Agripower France Sa or generate 31.46% return on investment over 90 days.

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

Agripower France Sa  vs.  Moulinvest

Agripower France

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agripower France Sa are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agripower France reported solid returns over the last few months and may actually be approaching a breakup point.

Moulinvest

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moulinvest are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Moulinvest reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agripower France and Moulinvest

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

The idea behind Agripower France Sa and Moulinvest 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.