Correlation Between Above Food and Planet Green
Can any of the company-specific risk be diversified away by investing in both Above Food and Planet Green 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 Above Food and Planet Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Above Food Ingredients and Planet Green Holdings, you can compare the effects of market volatilities on Above Food and Planet Green 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 Above Food with a short position of Planet Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Above Food and Planet Green.
Diversification Opportunities for Above Food and Planet Green
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Above and Planet is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Above Food Ingredients and Planet Green Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Green Holdings and Above Food 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 Above Food Ingredients are associated (or correlated) with Planet Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Green Holdings has no effect on the direction of Above Food i.e., Above Food and Planet Green go up and down completely randomly.
Pair Corralation between Above Food and Planet Green
Assuming the 90 days horizon Above Food Ingredients is expected to generate 3.03 times more return on investment than Planet Green. However, Above Food is 3.03 times more volatile than Planet Green Holdings. It trades about 0.1 of its potential returns per unit of risk. Planet Green Holdings is currently generating about 0.02 per unit of risk. If you would invest 5.50 in Above Food Ingredients on August 31, 2024 and sell it today you would lose (1.53) from holding Above Food Ingredients or give up 27.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.14% |
| Values | Daily Returns |
Above Food Ingredients vs. Planet Green Holdings
Performance |
| Timeline |
| Above Food Ingredients |
| Planet Green Holdings |
Above Food and Planet Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Above Food and Planet Green
The main advantage of trading using opposite Above Food and Planet Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Above Food position performs unexpectedly, Planet Green 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 Planet Green will offset losses from the drop in Planet Green's long position.| Above Food vs. Ainsworth Game Technology | Above Food vs. Willscot Mobile Mini | Above Food vs. Avis Budget Group | Above Food vs. Hertz Global Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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