Correlation Between AquaBounty Technologies and Golden Agri

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

By analyzing existing cross correlation between AquaBounty Technologies and Golden Agri Resources, you can compare the effects of market volatilities on AquaBounty Technologies and Golden Agri 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 AquaBounty Technologies with a short position of Golden Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of AquaBounty Technologies and Golden Agri.

Diversification Opportunities for AquaBounty Technologies and Golden Agri

0.8

Correlation Coefficient

AquaBounty Technologies  Golden Agri

Very poor diversification

The 3 months correlation between AquaBounty and Golden is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AquaBounty Technologies 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 AquaBounty Technologies 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 AquaBounty Technologies are associated (or correlated) with Golden Agri. 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 AquaBounty Technologies i.e., AquaBounty Technologies and Golden Agri go up and down completely randomly.

Pair Corralation between AquaBounty Technologies and Golden Agri

Considering the 90-day investment horizon AquaBounty Technologies is expected to under-perform the Golden Agri. In addition to that, AquaBounty Technologies is 1.04 times more volatile than Golden Agri Resources. It trades about -0.17 of its total potential returns per unit of risk. Golden Agri Resources is currently generating about -0.16 per unit of volatility. If you would invest  24.00  in Golden Agri Resources on September 25, 2024 and sell it today you would lose (11.00) from holding Golden Agri Resources or give up 45.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

AquaBounty Technologies  vs.  Golden Agri Resources

AquaBounty Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AquaBounty Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Golden Agri Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Agri Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AquaBounty Technologies and Golden Agri

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

The idea behind AquaBounty Technologies and Golden Agri Resources 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.