Correlation Between Agrogeneration and Kko International

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

By analyzing existing cross correlation between Agrogeneration and Kko International SA, you can compare the effects of market volatilities on Agrogeneration and Kko International 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 Agrogeneration with a short position of Kko International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrogeneration and Kko International.

Diversification Opportunities for Agrogeneration and Kko International

-0.78

Correlation Coefficient

Agrogeneration  Kko International

Pay attention - limited upside

The 3 months correlation between Agrogeneration and Kko is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Agrogeneration and Kko International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kko International and Agrogeneration 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 Agrogeneration are associated (or correlated) with Kko International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kko International has no effect on the direction of Agrogeneration i.e., Agrogeneration and Kko International go up and down completely randomly.

Pair Corralation between Agrogeneration and Kko International

Assuming the 90 days trading horizon Agrogeneration is expected to generate 1.3 times more return on investment than Kko International. However, Agrogeneration is 1.3 times more volatile than Kko International SA. It trades about 0.07 of its potential returns per unit of risk. Kko International SA is currently generating about -0.06 per unit of risk. If you would invest  4.89  in Agrogeneration on March 13, 2024 and sell it today you would earn a total of  0.81  from holding Agrogeneration or generate 16.56% return on investment over 90 days.

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

Agrogeneration  vs.  Kko International SA

Agrogeneration

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agrogeneration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agrogeneration reported solid returns over the last few months and may actually be approaching a breakup point.

Kko International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kko International SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Agrogeneration and Kko International

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

The idea behind Agrogeneration and Kko International SA 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.