Correlation Between AppHarvest and Edible Garden
Can any of the company-specific risk be diversified away by investing in both AppHarvest and Edible Garden 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 AppHarvest and Edible Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AppHarvest and Edible Garden AG, you can compare the effects of market volatilities on AppHarvest and Edible Garden 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 AppHarvest with a short position of Edible Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of AppHarvest and Edible Garden.
Diversification Opportunities for AppHarvest and Edible Garden
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between AppHarvest and Edible is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding AppHarvest and Edible Garden AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edible Garden AG and AppHarvest 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 AppHarvest are associated (or correlated) with Edible Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edible Garden AG has no effect on the direction of AppHarvest i.e., AppHarvest and Edible Garden go up and down completely randomly.
Pair Corralation between AppHarvest and Edible Garden
Given the investment horizon of 90 days AppHarvest is expected to under-perform the Edible Garden. But the stock apears to be less risky and, when comparing its historical volatility, AppHarvest is 8.16 times less risky than Edible Garden. The stock trades about -0.04 of its potential returns per unit of risk. The Edible Garden AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Edible Garden AG on September 2, 2024 and sell it today you would lose (19.74) from holding Edible Garden AG or give up 94.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 36.84% |
| Values | Daily Returns |
AppHarvest vs. Edible Garden AG
Performance |
| Timeline |
| AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Edible Garden AG |
AppHarvest and Edible Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AppHarvest and Edible Garden
The main advantage of trading using opposite AppHarvest and Edible Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AppHarvest position performs unexpectedly, Edible Garden 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 Edible Garden will offset losses from the drop in Edible Garden's long position.| AppHarvest vs. Porch Group | AppHarvest vs. Hydrofarm Holdings Group | AppHarvest vs. Danimer Scientific | AppHarvest vs. Open Lending Corp |
| Edible Garden vs. Edible Garden AG | Edible Garden vs. Iveda Solutions Warrant | Edible Garden vs. Aclarion |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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