Correlation Between KBR and Agrify Corp

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

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

Diversification Opportunities for KBR and Agrify Corp

0.62

Correlation Coefficient

KBR  Agrify Corp

Poor diversification

The 3 months correlation between KBR and Agrify is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KBR Inc and Agrify Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrify Corp and KBR 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 KBR Inc are associated (or correlated) with Agrify Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrify Corp has no effect on the direction of KBR i.e., KBR and Agrify Corp go up and down completely randomly.

Pair Corralation between KBR and Agrify Corp

Considering the 90-day investment horizon KBR Inc is expected to generate 0.2 times more return on investment than Agrify Corp. However, KBR Inc is 4.94 times less risky than Agrify Corp. It trades about -0.1 of its potential returns per unit of risk. Agrify Corp is currently generating about -0.07 per unit of risk. If you would invest  5,686  in KBR Inc on December 27, 2024 and sell it today you would lose (588.00) from holding KBR Inc or give up 10.34% of portfolio value over 90 days.

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

KBR Inc  vs.  Agrify Corp

KBR Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days KBR Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest sluggish performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Agrify Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agrify Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KBR and Agrify Corp

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

The idea behind KBR Inc and Agrify Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.