Correlation Between Forafric Global and AgriFORCE Growing

Can any of the company-specific risk be diversified away by investing in both Forafric Global and AgriFORCE Growing 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 AgriFORCE Growing 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 AgriFORCE Growing Systems, you can compare the effects of market volatilities on Forafric Global and AgriFORCE Growing 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 AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forafric Global and AgriFORCE Growing.

Diversification Opportunities for Forafric Global and AgriFORCE Growing

0.03

Correlation Coefficient

Forafric Global  AgriFORCE Growing

Significant diversification

The 3 months correlation between Forafric and AgriFORCE is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and AgriFORCE Growing Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriFORCE Growing Systems 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 AgriFORCE Growing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriFORCE Growing Systems has no effect on the direction of Forafric Global i.e., Forafric Global and AgriFORCE Growing go up and down completely randomly.

Pair Corralation between Forafric Global and AgriFORCE Growing

Assuming the 90 days horizon Forafric Global PLC is expected to generate 2.44 times more return on investment than AgriFORCE Growing. However, Forafric Global is 2.44 times more volatile than AgriFORCE Growing Systems. It trades about 0.08 of its potential returns per unit of risk. AgriFORCE Growing Systems is currently generating about 0.11 per unit of risk. If you would invest  60.00  in Forafric Global PLC on September 16, 2024 and sell it today you would earn a total of  43.00  from holding Forafric Global PLC or generate 71.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	78.08%
Values	Daily Returns

Forafric Global PLC  vs.  AgriFORCE Growing Systems

Forafric Global PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forafric Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

AgriFORCE Growing Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AgriFORCE Growing Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, AgriFORCE Growing is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Forafric Global and AgriFORCE Growing

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

The idea behind Forafric Global PLC and AgriFORCE Growing Systems 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.