Correlation Between Andersons and Bunge
Can any of the company-specific risk be diversified away by investing in both Andersons and Bunge 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 Andersons and Bunge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Andersons and Bunge Limited, you can compare the effects of market volatilities on Andersons and Bunge 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 Andersons with a short position of Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andersons and Bunge.
Diversification Opportunities for Andersons and Bunge
Almost no diversification
The 3 months correlation between Andersons and Bunge is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Andersons and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited and Andersons 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 The Andersons are associated (or correlated) with Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of Andersons i.e., Andersons and Bunge go up and down completely randomly.
Pair Corralation between Andersons and Bunge
Given the investment horizon of 90 days Andersons is expected to generate 1.83 times less return on investment than Bunge. In addition to that, Andersons is 1.47 times more volatile than Bunge Limited. It trades about 0.08 of its total potential returns per unit of risk. Bunge Limited is currently generating about 0.22 per unit of volatility. If you would invest 8,765 in Bunge Limited on January 26, 2024 and sell it today you would earn a total of 1,814 from holding Bunge Limited or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
The Andersons vs. Bunge Limited
Performance |
| Timeline |
| Andersons |
| Bunge Limited |
Andersons and Bunge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andersons and Bunge
The main advantage of trading using opposite Andersons and Bunge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andersons position performs unexpectedly, Bunge 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 Bunge will offset losses from the drop in Bunge's long position.| Andersons vs. Innovative Food Hldg | Andersons vs. Calavo Growers | Andersons vs. AMCON Distributing | Andersons vs. Mission Produce |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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