Correlation Between Agrogeneration and Amatheon Agri

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

By analyzing existing cross correlation between Agrogeneration and Amatheon Agri Holding, you can compare the effects of market volatilities on Agrogeneration and Amatheon Agri 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 Amatheon Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrogeneration and Amatheon Agri.

Diversification Opportunities for Agrogeneration and Amatheon Agri

0.47

Correlation Coefficient

Agrogeneration  Amatheon Agri

Very weak diversification

The 3 months correlation between Agrogeneration and Amatheon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Agrogeneration and Amatheon Agri Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amatheon Agri Holding 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 Amatheon Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amatheon Agri Holding has no effect on the direction of Agrogeneration i.e., Agrogeneration and Amatheon Agri go up and down completely randomly.

Pair Corralation between Agrogeneration and Amatheon Agri

Assuming the 90 days trading horizon Agrogeneration is expected to generate 0.67 times more return on investment than Amatheon Agri. However, Agrogeneration is 1.48 times less risky than Amatheon Agri. It trades about 0.07 of its potential returns per unit of risk. Amatheon Agri Holding is currently generating about 0.02 per unit of risk. If you would invest  2.49  in Agrogeneration on December 7, 2024 and sell it today you would earn a total of  4.41  from holding Agrogeneration or generate 177.11% return on investment over 90 days.

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

Agrogeneration  vs.  Amatheon Agri Holding

Agrogeneration

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agrogeneration are ranked lower than 9 (%) 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.

Amatheon Agri Holding

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amatheon Agri Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amatheon Agri reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agrogeneration and Amatheon Agri

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

The idea behind Agrogeneration and Amatheon Agri Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.