Correlation Between Clean Seas and Village Farms
Can any of the company-specific risk be diversified away by investing in both Clean Seas and Village Farms 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 Clean Seas and Village Farms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clean Seas Seafood and Village Farms International, you can compare the effects of market volatilities on Clean Seas and Village Farms 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 Clean Seas with a short position of Village Farms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Seas and Village Farms.
Diversification Opportunities for Clean Seas and Village Farms
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clean and Village is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Clean Seas Seafood and Village Farms International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Farms Intern and Clean Seas 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 Clean Seas Seafood are associated (or correlated) with Village Farms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Farms Intern has no effect on the direction of Clean Seas i.e., Clean Seas and Village Farms go up and down completely randomly.
Pair Corralation between Clean Seas and Village Farms
Assuming the 90 days horizon Clean Seas Seafood is expected to under-perform the Village Farms. But the pink sheet apears to be less risky and, when comparing its historical volatility, Clean Seas Seafood is 1.24 times less risky than Village Farms. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Village Farms International is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Village Farms International on August 25, 2024 and sell it today you would earn a total of 8.00 from holding Village Farms International or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Clean Seas Seafood vs. Village Farms International
Performance |
| Timeline |
| Clean Seas Seafood |
| Village Farms Intern |
Clean Seas and Village Farms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clean Seas and Village Farms
The main advantage of trading using opposite Clean Seas and Village Farms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clean Seas position performs unexpectedly, Village Farms 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 Village Farms will offset losses from the drop in Village Farms' long position.| Clean Seas vs. Avi Ltd ADR | Clean Seas vs. Altavoz Entertainment | Clean Seas vs. The a2 Milk | Clean Seas vs. Aryzta AG PK |
| Village Farms vs. NaturalShrimp | Village Farms vs. AgriFORCE Growing Systems | Village Farms vs. Atlantic Sapphire ASA | Village Farms vs. Fresh Del Monte |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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