Correlation Between Bunge and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Bunge and Adecoagro 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 Bunge and Adecoagro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunge Limited and Adecoagro SA, you can compare the effects of market volatilities on Bunge and Adecoagro 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 Bunge with a short position of Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunge and Adecoagro.
Diversification Opportunities for Bunge and Adecoagro
Very poor diversification
The 3 months correlation between Bunge and Adecoagro is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bunge Limited and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA and Bunge 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 Bunge Limited are associated (or correlated) with Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Bunge i.e., Bunge and Adecoagro go up and down completely randomly.
Pair Corralation between Bunge and Adecoagro
Allowing for the 90-day total investment horizon Bunge Limited is expected to generate 0.49 times more return on investment than Adecoagro. However, Bunge Limited is 2.03 times less risky than Adecoagro. It trades about 0.38 of its potential returns per unit of risk. Adecoagro SA is currently generating about 0.08 per unit of risk. If you would invest 9,994 in Bunge Limited on January 24, 2024 and sell it today you would earn a total of 981.00 from holding Bunge Limited or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bunge Limited vs. Adecoagro SA
Performance |
| Timeline |
| Bunge Limited |
| Adecoagro SA |
Bunge and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunge and Adecoagro
The main advantage of trading using opposite Bunge and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunge position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro's long position.| Bunge vs. NaturalShrimp | Bunge vs. AgriFORCE Growing Systems | Bunge vs. Atlantic Sapphire ASA | Bunge vs. AgriFORCE Growing Systems |
| Adecoagro vs. Bunge Limited | Adecoagro vs. Archer Daniels Midland | Adecoagro vs. Fresh Del Monte | Adecoagro vs. Limoneira Co |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |