Correlation Between AgriFORCE Growing and Forafric Global

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

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

Diversification Opportunities for AgriFORCE Growing and Forafric Global

-0.26

Correlation Coefficient

AgriFORCE Growing  Forafric Global

Very good diversification

The 3 months correlation between AgriFORCE and Forafric is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding AgriFORCE Growing Systems and Forafric Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forafric Global PLC and AgriFORCE Growing 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 AgriFORCE Growing Systems are associated (or correlated) with Forafric Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forafric Global PLC has no effect on the direction of AgriFORCE Growing i.e., AgriFORCE Growing and Forafric Global go up and down completely randomly.

Pair Corralation between AgriFORCE Growing and Forafric Global

Assuming the 90 days horizon AgriFORCE Growing Systems is expected to generate 5.89 times more return on investment than Forafric Global. However, AgriFORCE Growing is 5.89 times more volatile than Forafric Global PLC. It trades about 0.16 of its potential returns per unit of risk. Forafric Global PLC is currently generating about 0.12 per unit of risk. If you would invest  1.17  in AgriFORCE Growing Systems on March 28, 2024 and sell it today you would lose (0.19) from holding AgriFORCE Growing Systems or give up 16.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.32%
Values	Daily Returns

AgriFORCE Growing Systems  vs.  Forafric Global PLC

AgriFORCE Growing Systems

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AgriFORCE Growing Systems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, AgriFORCE Growing showed solid returns over the last few months and may actually be approaching a breakup point.

Forafric Global PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Forafric Global PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Forafric Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AgriFORCE Growing and Forafric Global

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

The idea behind AgriFORCE Growing Systems and Forafric Global PLC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.