Correlation Between Carlson Investments and Agroton Public

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

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

Diversification Opportunities for Carlson Investments and Agroton Public

0.08

Correlation Coefficient

Carlson Investments  Agroton Public

Significant diversification

The 3 months correlation between Carlson and Agroton is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Carlson Investments SA and Agroton Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agroton Public and Carlson Investments 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 Carlson Investments SA are associated (or correlated) with Agroton Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agroton Public has no effect on the direction of Carlson Investments i.e., Carlson Investments and Agroton Public go up and down completely randomly.

Pair Corralation between Carlson Investments and Agroton Public

Assuming the 90 days trading horizon Carlson Investments is expected to generate 1.98 times less return on investment than Agroton Public. But when comparing it to its historical volatility, Carlson Investments SA is 1.04 times less risky than Agroton Public. It trades about 0.08 of its potential returns per unit of risk. Agroton Public is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  369.00  in Agroton Public on December 24, 2024 and sell it today you would earn a total of  267.00  from holding Agroton Public or generate 72.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Carlson Investments SA  vs.  Agroton Public

Carlson Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlson Investments SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Carlson Investments reported solid returns over the last few months and may actually be approaching a breakup point.

Agroton Public

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agroton Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agroton Public reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlson Investments and Agroton Public

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

The idea behind Carlson Investments SA and Agroton Public 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.