Correlation Between Golden Agri-Resources and Local Bounti
Can any of the company-specific risk be diversified away by investing in both Golden Agri-Resources and Local Bounti 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 Golden Agri-Resources and Local Bounti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Agri Resources and Local Bounti Corp, you can compare the effects of market volatilities on Golden Agri-Resources and Local Bounti 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 Golden Agri-Resources with a short position of Local Bounti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Agri-Resources and Local Bounti.
Diversification Opportunities for Golden Agri-Resources and Local Bounti
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Golden and Local is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Golden Agri Resources and Local Bounti Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Local Bounti Corp and Golden Agri-Resources 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 Golden Agri Resources are associated (or correlated) with Local Bounti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Local Bounti Corp has no effect on the direction of Golden Agri-Resources i.e., Golden Agri-Resources and Local Bounti go up and down completely randomly.
Pair Corralation between Golden Agri-Resources and Local Bounti
Assuming the 90 days horizon Golden Agri Resources is expected to generate 0.75 times more return on investment than Local Bounti. However, Golden Agri Resources is 1.34 times less risky than Local Bounti. It trades about 0.05 of its potential returns per unit of risk. Local Bounti Corp is currently generating about -0.03 per unit of risk. If you would invest 16.00 in Golden Agri Resources on June 23, 2024 and sell it today you would earn a total of 5.00 from holding Golden Agri Resources or generate 31.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 59.34% |
Values | Daily Returns |
Golden Agri Resources vs. Local Bounti Corp
Performance |
Timeline |
Golden Agri Resources |
Local Bounti Corp |
Golden Agri-Resources and Local Bounti Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Agri-Resources and Local Bounti
The main advantage of trading using opposite Golden Agri-Resources and Local Bounti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Agri-Resources position performs unexpectedly, Local Bounti 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 Local Bounti will offset losses from the drop in Local Bounti's long position.Golden Agri-Resources vs. Artisan Consumer Goods | Golden Agri-Resources vs. Altavoz Entertainment | Golden Agri-Resources vs. Avi Ltd ADR | Golden Agri-Resources vs. Aryzta AG PK |
Local Bounti vs. Aryzta AG PK | Local Bounti vs. Bridgford Foods | Local Bounti vs. John B Sanfilippo | Local Bounti vs. Treehouse Foods |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Global Correlations Find global opportunities by holding instruments from different markets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |