Correlation Between Mission Produce and African Agriculture
Can any of the company-specific risk be diversified away by investing in both Mission Produce and African Agriculture 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 Mission Produce and African Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mission Produce and African Agriculture Holdings, you can compare the effects of market volatilities on Mission Produce and African Agriculture 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 Mission Produce with a short position of African Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mission Produce and African Agriculture.
Diversification Opportunities for Mission Produce and African Agriculture
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mission and African is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mission Produce and African Agriculture Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Agriculture and Mission Produce 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 Mission Produce are associated (or correlated) with African Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Agriculture has no effect on the direction of Mission Produce i.e., Mission Produce and African Agriculture go up and down completely randomly.
Pair Corralation between Mission Produce and African Agriculture
If you would invest 1,193 in Mission Produce on August 31, 2024 and sell it today you would earn a total of 107.00 from holding Mission Produce or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Mission Produce vs. African Agriculture Holdings
Performance |
| Timeline |
| Mission Produce |
| African Agriculture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mission Produce and African Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mission Produce and African Agriculture
The main advantage of trading using opposite Mission Produce and African Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mission Produce position performs unexpectedly, African Agriculture 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 African Agriculture will offset losses from the drop in African Agriculture's long position.| Mission Produce vs. The Chefs Warehouse | Mission Produce vs. The Andersons | Mission Produce vs. AMCON Distributing | Mission Produce vs. Performance Food Group |
| African Agriculture vs. Eastern Co | African Agriculture vs. Cebu Air ADR | African Agriculture vs. Hf Foods Group | African Agriculture vs. Porvair plc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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