Correlation Between AgroFresh Solutions and SW Seed

Can any of the company-specific risk be diversified away by investing in both AgroFresh Solutions and SW Seed 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 AgroFresh Solutions and SW Seed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AgroFresh Solutions and SW Seed Company, you can compare the effects of market volatilities on AgroFresh Solutions and SW Seed 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 AgroFresh Solutions with a short position of SW Seed. Check out your portfolio center. Please also check ongoing floating volatility patterns of AgroFresh Solutions and SW Seed.

Diversification Opportunities for AgroFresh Solutions and SW Seed

-0.57

Correlation Coefficient

AgroFresh Solutions  SW Seed

Excellent diversification

The 3 months correlation between AgroFresh and SANW is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AgroFresh Solutions and SW Seed Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SW Seed Company and AgroFresh Solutions 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 AgroFresh Solutions are associated (or correlated) with SW Seed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SW Seed Company has no effect on the direction of AgroFresh Solutions i.e., AgroFresh Solutions and SW Seed go up and down completely randomly.

Pair Corralation between AgroFresh Solutions and SW Seed

If you would invest  300.00  in AgroFresh Solutions on February 1, 2024 and sell it today you would earn a total of  0.00  from holding AgroFresh Solutions or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

AgroFresh Solutions  vs.  SW Seed Company

AgroFresh Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgroFresh Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, AgroFresh Solutions is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

SW Seed Company

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SW Seed Company has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with AgroFresh Solutions and SW Seed

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

The idea behind AgroFresh Solutions and SW Seed Company 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.