Correlation Between Agripure Holdings and Asian Sea

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

By analyzing existing cross correlation between Agripure Holdings Public and Asian Sea, you can compare the effects of market volatilities on Agripure Holdings and Asian Sea 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 Agripure Holdings with a short position of Asian Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agripure Holdings and Asian Sea.

Diversification Opportunities for Agripure Holdings and Asian Sea

0.6

Correlation Coefficient

Agripure Holdings  Asian Sea

Poor diversification

The 3 months correlation between Agripure and Asian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Agripure Holdings Public and Asian Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asian Sea and Agripure Holdings 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 Agripure Holdings Public are associated (or correlated) with Asian Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asian Sea has no effect on the direction of Agripure Holdings i.e., Agripure Holdings and Asian Sea go up and down completely randomly.

Pair Corralation between Agripure Holdings and Asian Sea

Assuming the 90 days trading horizon Agripure Holdings Public is expected to under-perform the Asian Sea. But the stock apears to be less risky and, when comparing its historical volatility, Agripure Holdings Public is 1.31 times less risky than Asian Sea. The stock trades about -0.08 of its potential returns per unit of risk. The Asian Sea is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  890.00  in Asian Sea on September 12, 2024 and sell it today you would lose (50.00) from holding Asian Sea or give up 5.62% of portfolio value over 90 days.

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

Agripure Holdings Public  vs.  Asian Sea

Agripure Holdings Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agripure Holdings Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Asian Sea

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asian Sea has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Asian Sea is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Agripure Holdings and Asian Sea

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

The idea behind Agripure Holdings Public and Asian Sea 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.