Correlation Between Safe Orthopaedics and Agrogeneration

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

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

Diversification Opportunities for Safe Orthopaedics and Agrogeneration

0.11

Correlation Coefficient

Safe Orthopaedics  Agrogeneration

Average diversification

The 3 months correlation between Safe and Agrogeneration is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Safe Orthopaedics SA and Agrogeneration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrogeneration and Safe Orthopaedics 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 Safe Orthopaedics SA are associated (or correlated) with Agrogeneration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrogeneration has no effect on the direction of Safe Orthopaedics i.e., Safe Orthopaedics and Agrogeneration go up and down completely randomly.

Pair Corralation between Safe Orthopaedics and Agrogeneration

Assuming the 90 days trading horizon Safe Orthopaedics SA is expected to under-perform the Agrogeneration. In addition to that, Safe Orthopaedics is 3.19 times more volatile than Agrogeneration. It trades about -0.03 of its total potential returns per unit of risk. Agrogeneration is currently generating about 0.25 per unit of volatility. If you would invest  4.96  in Agrogeneration on October 5, 2024 and sell it today you would earn a total of  0.82  from holding Agrogeneration or generate 16.53% return on investment over 90 days.

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

Safe Orthopaedics SA  vs.  Agrogeneration

Safe Orthopaedics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safe Orthopaedics SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Agrogeneration

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agrogeneration are ranked lower than 2 (%) 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.

Pair Trading with Safe Orthopaedics and Agrogeneration

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

The idea behind Safe Orthopaedics SA and Agrogeneration 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.