Correlation Between Agrogeneration and Lacroix Group

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

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

Diversification Opportunities for Agrogeneration and Lacroix Group

-0.26

Correlation Coefficient

Agrogeneration  Lacroix Group

Very good diversification

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

Pair Corralation between Agrogeneration and Lacroix Group

Assuming the 90 days trading horizon Agrogeneration is expected to generate 1.9 times more return on investment than Lacroix Group. However, Agrogeneration is 1.9 times more volatile than Lacroix Group SA. It trades about 0.11 of its potential returns per unit of risk. Lacroix Group SA is currently generating about 0.02 per unit of risk. If you would invest  5.80  in Agrogeneration on December 26, 2024 and sell it today you would earn a total of  1.94  from holding Agrogeneration or generate 33.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Agrogeneration  vs.  Lacroix Group SA

Agrogeneration

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agrogeneration are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agrogeneration reported solid returns over the last few months and may actually be approaching a breakup point.

Lacroix Group SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lacroix Group SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lacroix Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Agrogeneration and Lacroix Group

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

The idea behind Agrogeneration and Lacroix Group 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.