Correlation Between Forafric Global and Archer Daniels

Can any of the company-specific risk be diversified away by investing in both Forafric Global and Archer Daniels 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 Forafric Global and Archer Daniels into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Forafric Global PLC and Archer Daniels Midland, you can compare the effects of market volatilities on Forafric Global and Archer Daniels 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 Forafric Global with a short position of Archer Daniels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and Archer Daniels.

Diversification Opportunities for Forafric Global and Archer Daniels

-0.51

Correlation Coefficient

Forafric Global  Archer Daniels

Excellent diversification

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

Pair Corralation between Forafric Global and Archer Daniels

Given the investment horizon of 90 days Forafric Global PLC is expected to under-perform the Archer Daniels. But the stock apears to be less risky and, when comparing its historical volatility, Forafric Global PLC is 2.01 times less risky than Archer Daniels. The stock trades about -0.15 of its potential returns per unit of risk. The Archer Daniels Midland is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,828  in Archer Daniels Midland on April 24, 2025 and sell it today you would earn a total of  794.00  from holding Archer Daniels Midland or generate 16.45% return on investment over 90 days.

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

Forafric Global PLC  vs.  Archer Daniels Midland

Forafric Global PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Forafric Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Archer Daniels Midland

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Daniels Midland are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Archer Daniels displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forafric Global and Archer Daniels

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

The idea behind Forafric Global PLC and Archer Daniels Midland 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.