Correlation Between Bonduelle SCA and Agrogeneration

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

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

Diversification Opportunities for Bonduelle SCA and Agrogeneration

0.16

Correlation Coefficient

Bonduelle SCA  Agrogeneration

Average diversification

The 3 months correlation between Bonduelle and Agrogeneration is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bonduelle SCA and Agrogeneration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrogeneration and Bonduelle SCA 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 Bonduelle SCA are associated (or correlated) with Agrogeneration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrogeneration has no effect on the direction of Bonduelle SCA i.e., Bonduelle SCA and Agrogeneration go up and down completely randomly.

Pair Corralation between Bonduelle SCA and Agrogeneration

Assuming the 90 days trading horizon Bonduelle SCA is expected to under-perform the Agrogeneration. But the stock apears to be less risky and, when comparing its historical volatility, Bonduelle SCA is 4.65 times less risky than Agrogeneration. The stock trades about -0.17 of its potential returns per unit of risk. The Agrogeneration is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Agrogeneration on September 27, 2024 and sell it today you would earn a total of  0.92  from holding Agrogeneration or generate 18.4% return on investment over 90 days.

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

Bonduelle SCA  vs.  Agrogeneration

Bonduelle SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bonduelle SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Agrogeneration

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agrogeneration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agrogeneration reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bonduelle SCA and Agrogeneration

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

The idea behind Bonduelle SCA and Agrogeneration 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.