Correlation Between Village Farms and Golden Agri-Resources
Can any of the company-specific risk be diversified away by investing in both Village Farms and Golden Agri-Resources 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 Village Farms and Golden Agri-Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Farms International and Golden Agri Resources, you can compare the effects of market volatilities on Village Farms and Golden Agri-Resources 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 Village Farms with a short position of Golden Agri-Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Farms and Golden Agri-Resources.
Diversification Opportunities for Village Farms and Golden Agri-Resources
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Village and Golden is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Village Farms International and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources and Village Farms 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 Village Farms International are associated (or correlated) with Golden Agri-Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Village Farms i.e., Village Farms and Golden Agri-Resources go up and down completely randomly.
Pair Corralation between Village Farms and Golden Agri-Resources
Considering the 90-day investment horizon Village Farms International is expected to generate 1.62 times more return on investment than Golden Agri-Resources. However, Village Farms is 1.62 times more volatile than Golden Agri Resources. It trades about -0.04 of its potential returns per unit of risk. Golden Agri Resources is currently generating about -0.07 per unit of risk. If you would invest 79.00 in Village Farms International on December 4, 2024 and sell it today you would lose (10.00) from holding Village Farms International or give up 12.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Village Farms International vs. Golden Agri Resources
Performance |
Timeline |
Village Farms Intern |
Golden Agri Resources |
Village Farms and Golden Agri-Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Village Farms and Golden Agri-Resources
The main advantage of trading using opposite Village Farms and Golden Agri-Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Farms position performs unexpectedly, Golden Agri-Resources 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 Golden Agri-Resources will offset losses from the drop in Golden Agri-Resources' long position.Village Farms vs. NaturalShrimp | Village Farms vs. AgriFORCE Growing Systems | Village Farms vs. Atlantic Sapphire ASA | Village Farms vs. Fresh Del Monte |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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