Correlation Between Golden Agri-Resources and Kuehne +

Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Kuehne + 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 Kuehne + 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 Kuehne Nagel International, you can compare the effects of market volatilities on Golden Agri-Resources and Kuehne + 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 Kuehne +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Kuehne +.

Diversification Opportunities for Golden Agri-Resources and Kuehne +

0.01

Correlation Coefficient

Golden Agri-Resources  Kuehne +

Significant diversification

The 3 months correlation between Golden and Kuehne is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Kuehne Nagel International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuehne Nagel Interna 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 Kuehne +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuehne Nagel Interna has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Kuehne + go up and down completely randomly.

Pair Corralation between Golden Agri-Resources and Kuehne +

Assuming the 90 days horizon Golden Agri Resources is expected to generate 7.23 times more return on investment than Kuehne +. However, Golden Agri-Resources is 7.23 times more volatile than Kuehne Nagel International. It trades about 0.02 of its potential returns per unit of risk. Kuehne Nagel International is currently generating about 0.06 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	Insignificant
Accuracy	69.49%
Values	Daily Returns

Golden Agri Resources  vs.  Kuehne Nagel International

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.

Kuehne Nagel Interna

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kuehne Nagel International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Kuehne + may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Golden Agri-Resources and Kuehne +

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

The idea behind Golden Agri Resources and Kuehne Nagel International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.