Correlation Between Atlantic Sapphire and AgriFORCE Growing

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

By analyzing existing cross correlation between Atlantic Sapphire ASA and AgriFORCE Growing Systems, you can compare the effects of market volatilities on Atlantic Sapphire and AgriFORCE Growing 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 Atlantic Sapphire with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Sapphire and AgriFORCE Growing.

Diversification Opportunities for Atlantic Sapphire and AgriFORCE Growing

-0.51

Correlation Coefficient

Atlantic Sapphire  AgriFORCE Growing

Excellent diversification

The 3 months correlation between Atlantic and AgriFORCE is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Sapphire ASA and AgriFORCE Growing Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriFORCE Growing Systems and Atlantic Sapphire 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 Atlantic Sapphire ASA are associated (or correlated) with AgriFORCE Growing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriFORCE Growing Systems has no effect on the direction of Atlantic Sapphire i.e., Atlantic Sapphire and AgriFORCE Growing go up and down completely randomly.

Pair Corralation between Atlantic Sapphire and AgriFORCE Growing

Assuming the 90 days horizon Atlantic Sapphire is expected to generate 52.93 times less return on investment than AgriFORCE Growing. But when comparing it to its historical volatility, Atlantic Sapphire ASA is 4.66 times less risky than AgriFORCE Growing. It trades about 0.01 of its potential returns per unit of risk. AgriFORCE Growing Systems is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  0.61  in AgriFORCE Growing Systems on February 5, 2024 and sell it today you would earn a total of  0.03  from holding AgriFORCE Growing Systems or generate 4.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	50.0%
Values	Daily Returns

Atlantic Sapphire ASA  vs.  AgriFORCE Growing Systems

Atlantic Sapphire ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlantic Sapphire ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AgriFORCE Growing Systems

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days AgriFORCE Growing Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal forward indicators, AgriFORCE Growing showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atlantic Sapphire and AgriFORCE Growing

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

The idea behind Atlantic Sapphire ASA and AgriFORCE Growing Systems 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.