Correlation Between Agrogalaxy Participacoes and Tres Tentos

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

By analyzing existing cross correlation between Agrogalaxy Participacoes SA and Tres Tentos Agroindustrial, you can compare the effects of market volatilities on Agrogalaxy Participacoes and Tres Tentos 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 Agrogalaxy Participacoes with a short position of Tres Tentos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrogalaxy Participacoes and Tres Tentos.

Diversification Opportunities for Agrogalaxy Participacoes and Tres Tentos

0.49

Correlation Coefficient

Agrogalaxy Participacoes  Tres Tentos

Very weak diversification

The 3 months correlation between Agrogalaxy and Tres is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Agrogalaxy Participacoes SA and Tres Tentos Agroindustrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tres Tentos Agroindu and Agrogalaxy Participacoes 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 Agrogalaxy Participacoes SA are associated (or correlated) with Tres Tentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tres Tentos Agroindu has no effect on the direction of Agrogalaxy Participacoes i.e., Agrogalaxy Participacoes and Tres Tentos go up and down completely randomly.

Pair Corralation between Agrogalaxy Participacoes and Tres Tentos

Assuming the 90 days trading horizon Agrogalaxy Participacoes SA is expected to generate 3.79 times more return on investment than Tres Tentos. However, Agrogalaxy Participacoes is 3.79 times more volatile than Tres Tentos Agroindustrial. It trades about -0.04 of its potential returns per unit of risk. Tres Tentos Agroindustrial is currently generating about -0.17 per unit of risk. If you would invest  795.00  in Agrogalaxy Participacoes SA on April 17, 2025 and sell it today you would lose (191.00) from holding Agrogalaxy Participacoes SA or give up 24.03% of portfolio value over 90 days.

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

Agrogalaxy Participacoes SA  vs.  Tres Tentos Agroindustrial

Agrogalaxy Participacoes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agrogalaxy Participacoes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Tres Tentos Agroindu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tres Tentos Agroindustrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Agrogalaxy Participacoes and Tres Tentos

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

The idea behind Agrogalaxy Participacoes SA and Tres Tentos Agroindustrial 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.