Correlation Between Bunge and Mission Produce
Can any of the company-specific risk be diversified away by investing in both Bunge and Mission Produce 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 Bunge and Mission Produce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunge Limited and Mission Produce, you can compare the effects of market volatilities on Bunge and Mission Produce 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 Bunge with a short position of Mission Produce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunge and Mission Produce.
Diversification Opportunities for Bunge and Mission Produce
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bunge and Mission is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bunge Limited and Mission Produce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mission Produce and Bunge 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 Bunge Limited are associated (or correlated) with Mission Produce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mission Produce has no effect on the direction of Bunge i.e., Bunge and Mission Produce go up and down completely randomly.
Pair Corralation between Bunge and Mission Produce
Allowing for the 90-day total investment horizon Bunge Limited is expected to under-perform the Mission Produce. But the stock apears to be less risky and, when comparing its historical volatility, Bunge Limited is 1.8 times less risky than Mission Produce. The stock trades about -0.02 of its potential returns per unit of risk. The Mission Produce is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,195 in Mission Produce on August 28, 2024 and sell it today you would earn a total of 102.00 from holding Mission Produce or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bunge Limited vs. Mission Produce
Performance |
| Timeline |
| Bunge Limited |
| Mission Produce |
Bunge and Mission Produce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunge and Mission Produce
The main advantage of trading using opposite Bunge and Mission Produce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunge position performs unexpectedly, Mission Produce 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 Mission Produce will offset losses from the drop in Mission Produce's long position.The idea behind Bunge Limited and Mission Produce pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mission Produce vs. The Chefs Warehouse | Mission Produce vs. The Andersons | Mission Produce vs. AMCON Distributing | Mission Produce vs. Performance Food Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |