Correlation Between Beyond Oil and Freshpet
Can any of the company-specific risk be diversified away by investing in both Beyond Oil and Freshpet 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 Beyond Oil and Freshpet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Oil and Freshpet, you can compare the effects of market volatilities on Beyond Oil and Freshpet 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 Beyond Oil with a short position of Freshpet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Oil and Freshpet.
Diversification Opportunities for Beyond Oil and Freshpet
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beyond and Freshpet is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Oil and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet and Beyond Oil 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 Beyond Oil are associated (or correlated) with Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of Beyond Oil i.e., Beyond Oil and Freshpet go up and down completely randomly.
Pair Corralation between Beyond Oil and Freshpet
Assuming the 90 days horizon Beyond Oil is expected to generate 2.51 times more return on investment than Freshpet. However, Beyond Oil is 2.51 times more volatile than Freshpet. It trades about 0.06 of its potential returns per unit of risk. Freshpet is currently generating about 0.09 per unit of risk. If you would invest 48.00 in Beyond Oil on August 27, 2024 and sell it today you would earn a total of 63.00 from holding Beyond Oil or generate 131.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.9% |
| Values | Daily Returns |
Beyond Oil vs. Freshpet
Performance |
| Timeline |
| Beyond Oil |
| Freshpet |
Beyond Oil and Freshpet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Oil and Freshpet
The main advantage of trading using opposite Beyond Oil and Freshpet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Oil position performs unexpectedly, Freshpet 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 Freshpet will offset losses from the drop in Freshpet's long position.| Beyond Oil vs. Titan Machinery | Beyond Oil vs. Everspin Technologies | Beyond Oil vs. Asbury Automotive Group | Beyond Oil vs. Simon Property Group |
| Freshpet vs. Post Holdings | Freshpet vs. Simply Good Foods | Freshpet vs. Treehouse Foods | Freshpet vs. J J Snack |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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