Correlation Between GFPT Public and Agripure Holdings

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

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

Diversification Opportunities for GFPT Public and Agripure Holdings

0.65

Correlation Coefficient

GFPT Public  Agripure Holdings

Poor diversification

The 3 months correlation between GFPT and Agripure is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GFPT Public and Agripure Holdings Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agripure Holdings Public and GFPT Public 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 GFPT Public are associated (or correlated) with Agripure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agripure Holdings Public has no effect on the direction of GFPT Public i.e., GFPT Public and Agripure Holdings go up and down completely randomly.

Pair Corralation between GFPT Public and Agripure Holdings

Assuming the 90 days trading horizon GFPT Public is expected to generate 0.77 times more return on investment than Agripure Holdings. However, GFPT Public is 1.29 times less risky than Agripure Holdings. It trades about -0.02 of its potential returns per unit of risk. Agripure Holdings Public is currently generating about -0.09 per unit of risk. If you would invest  1,070  in GFPT Public on September 12, 2024 and sell it today you would lose (10.00) from holding GFPT Public or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

GFPT Public  vs.  Agripure Holdings Public

GFPT Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GFPT Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

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.

Pair Trading with GFPT Public and Agripure Holdings

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

The idea behind GFPT Public and Agripure Holdings Public 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.