Correlation Between Ag Growth and Richards Packaging

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

By analyzing existing cross correlation between Ag Growth International and Richards Packaging Income, you can compare the effects of market volatilities on Ag Growth and Richards Packaging 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 Ag Growth with a short position of Richards Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ag Growth and Richards Packaging.

Diversification Opportunities for Ag Growth and Richards Packaging

0.89

Correlation Coefficient

Ag Growth  Richards Packaging

Very poor diversification

The 3 months correlation between AFN and Richards is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ag Growth International and Richards Packaging Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richards Packaging Income and Ag Growth 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 Ag Growth International are associated (or correlated) with Richards Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richards Packaging Income has no effect on the direction of Ag Growth i.e., Ag Growth and Richards Packaging go up and down completely randomly.

Pair Corralation between Ag Growth and Richards Packaging

Assuming the 90 days trading horizon Ag Growth International is expected to generate 1.65 times more return on investment than Richards Packaging. However, Ag Growth is 1.65 times more volatile than Richards Packaging Income. It trades about 0.26 of its potential returns per unit of risk. Richards Packaging Income is currently generating about 0.29 per unit of risk. If you would invest  3,197  in Ag Growth International on April 23, 2025 and sell it today you would earn a total of  1,091  from holding Ag Growth International or generate 34.13% return on investment over 90 days.

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

Ag Growth International  vs.  Richards Packaging Income

Ag Growth International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ag Growth International are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ag Growth displayed solid returns over the last few months and may actually be approaching a breakup point.

Richards Packaging Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Richards Packaging Income are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Richards Packaging sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ag Growth and Richards Packaging

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

The idea behind Ag Growth International and Richards Packaging Income 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.