Risk-return profile of Ukrainian agribusiness: assessing the potential of investment policy

Abstract

Of all the sectors in the Ukrainian economy that are available on the stock market, agribusiness has the greatest performance. The efforts to overcome the consequences of an oligarchic past and the chance of reconstruction could be a deciding factor for its future. The study focuses on analysing the investment portfolio of Ukrainian agribusiness firms listed on the European stock markets (i.e., the profitability of a portfolio -on the basis of cumulative return; the assessment of risk -on the basis of standard deviation and change in daily return; the level of predictability -by using methods of machine learning and linear regression; and the possibility of a long-term strategy -based on a 5-factor model of Fama-French). Taking into consideration many diverse aspects, Ukrainian agricultural companies trading on global stock markets can be a very risky affair. The agricultural sector's portfolio is composed of weak, cautious, and high-risk businesses. In view of the prevailing conditions of a post-oligarchic society, ineffectual market arrangements, business haziness, and the ongoing war, it is improbable that Ukrainian agrarian businesses will be able to contend with agricultural companies listed on European stock exchanges.