Correlation Between Golden Agri-Resources and Boyd Group

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

By analyzing existing cross correlation between Golden Agri Resources and Boyd Group Services, you can compare the effects of market volatilities on Golden Agri-Resources and Boyd 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 Golden Agri-Resources with a short position of Boyd Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Boyd Group.

Diversification Opportunities for Golden Agri-Resources and Boyd Group

0.53

Correlation Coefficient

Golden Agri-Resources  Boyd Group

Very weak diversification

The 3 months correlation between Golden and Boyd is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Boyd Group Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boyd Group Services and Golden Agri-Resources 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 Golden Agri Resources are associated (or correlated) with Boyd Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boyd Group Services has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Boyd Group go up and down completely randomly.

Pair Corralation between Golden Agri-Resources and Boyd Group

Assuming the 90 days horizon Golden Agri Resources is expected to generate 9.23 times more return on investment than Boyd Group. However, Golden Agri-Resources is 9.23 times more volatile than Boyd Group Services. It trades about 0.02 of its potential returns per unit of risk. Boyd Group Services is currently generating about 0.1 per unit of risk. If you would invest  17.00  in Golden Agri Resources on November 29, 2024 and sell it today you would lose (3.00) from holding Golden Agri Resources or give up 17.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	65.08%
Values	Daily Returns

Golden Agri Resources  vs.  Boyd Group Services

Golden Agri Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Agri Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Golden Agri-Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Boyd Group Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boyd Group Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Boyd Group may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Golden Agri-Resources and Boyd Group

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

The idea behind Golden Agri Resources and Boyd Group Services 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.