Correlation Between AGRICULTBK HADR25 and H FARM

Can any of the company-specific risk be diversified away by investing in both AGRICULTBK HADR25 and H FARM 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 AGRICULTBK HADR25 and H FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGRICULTBK HADR25 YC and H FARM SPA, you can compare the effects of market volatilities on AGRICULTBK HADR25 and H FARM 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 AGRICULTBK HADR25 with a short position of H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTBK HADR25 and H FARM.

Diversification Opportunities for AGRICULTBK HADR25 and H FARM

-0.61

Correlation Coefficient

AGRICULTBK HADR25  H FARM

Excellent diversification

The 3 months correlation between AGRICULTBK and 5JQ is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AGRICULTBK HADR25 YC and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA and AGRICULTBK HADR25 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 AGRICULTBK HADR25 YC are associated (or correlated) with H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of AGRICULTBK HADR25 i.e., AGRICULTBK HADR25 and H FARM go up and down completely randomly.

Pair Corralation between AGRICULTBK HADR25 and H FARM

Assuming the 90 days trading horizon AGRICULTBK HADR25 YC is expected to generate 0.5 times more return on investment than H FARM. However, AGRICULTBK HADR25 YC is 1.99 times less risky than H FARM. It trades about 0.19 of its potential returns per unit of risk. H FARM SPA is currently generating about -0.01 per unit of risk. If you would invest  935.00  in AGRICULTBK HADR25 YC on September 11, 2024 and sell it today you would earn a total of  265.00  from holding AGRICULTBK HADR25 YC or generate 28.34% return on investment over 90 days.

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

AGRICULTBK HADR25 YC  vs.  H FARM SPA

AGRICULTBK HADR25

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AGRICULTBK HADR25 YC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AGRICULTBK HADR25 reported solid returns over the last few months and may actually be approaching a breakup point.

H FARM SPA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H FARM SPA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, H FARM is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AGRICULTBK HADR25 and H FARM

The main advantage of trading using opposite AGRICULTBK HADR25 and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICULTBK HADR25 position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.

The idea behind AGRICULTBK HADR25 YC and H FARM SPA 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.