Correlation Between SLC Agricola and Forafric Global

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

By analyzing existing cross correlation between SLC Agricola SA and Forafric Global PLC, you can compare the effects of market volatilities on SLC Agricola and Forafric Global 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 SLC Agricola with a short position of Forafric Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agricola and Forafric Global.

Diversification Opportunities for SLC Agricola and Forafric Global

-0.05

Correlation Coefficient

SLC Agricola  Forafric Global

Good diversification

The 3 months correlation between SLC and Forafric is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agricola SA and Forafric Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forafric Global PLC and SLC Agricola 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 SLC Agricola SA are associated (or correlated) with Forafric Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forafric Global PLC has no effect on the direction of SLC Agricola i.e., SLC Agricola and Forafric Global go up and down completely randomly.

Pair Corralation between SLC Agricola and Forafric Global

Assuming the 90 days horizon SLC Agricola SA is expected to generate 11.37 times more return on investment than Forafric Global. However, SLC Agricola is 11.37 times more volatile than Forafric Global PLC. It trades about 0.06 of its potential returns per unit of risk. Forafric Global PLC is currently generating about 0.0 per unit of risk. If you would invest  378.00  in SLC Agricola SA on October 5, 2024 and sell it today you would lose (99.00) from holding SLC Agricola SA or give up 26.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.58%
Values	Daily Returns

SLC Agricola SA  vs.  Forafric Global PLC

SLC Agricola SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SLC Agricola SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Forafric Global PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forafric Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Forafric Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SLC Agricola and Forafric Global

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

The idea behind SLC Agricola SA and Forafric Global PLC 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.