Correlation Between Agriculture Natural and Focus Impact

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

By analyzing existing cross correlation between Agriculture Natural Solutions and Focus Impact Acquisition, you can compare the effects of market volatilities on Agriculture Natural and Focus Impact 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 Agriculture Natural with a short position of Focus Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agriculture Natural and Focus Impact.

Diversification Opportunities for Agriculture Natural and Focus Impact

0.0

Correlation Coefficient

Agriculture Natural  Focus Impact

Pay attention - limited upside

The 3 months correlation between Agriculture and Focus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Agriculture Natural Solutions and Focus Impact Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Impact Acquisition and Agriculture Natural 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 Agriculture Natural Solutions are associated (or correlated) with Focus Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Impact Acquisition has no effect on the direction of Agriculture Natural i.e., Agriculture Natural and Focus Impact go up and down completely randomly.

Pair Corralation between Agriculture Natural and Focus Impact

If you would invest  27.00  in Agriculture Natural Solutions on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Agriculture Natural Solutions or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Agriculture Natural Solutions  vs.  Focus Impact Acquisition

Agriculture Natural

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agriculture Natural Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Agriculture Natural showed solid returns over the last few months and may actually be approaching a breakup point.

Focus Impact Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Focus Impact Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Focus Impact is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Agriculture Natural and Focus Impact

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

The idea behind Agriculture Natural Solutions and Focus Impact Acquisition 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..