Correlation Between Dole PLC and Forafric Global
Can any of the company-specific risk be diversified away by investing in both Dole PLC and Forafric Global 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 Dole PLC and Forafric Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dole PLC and Forafric Global PLC, you can compare the effects of market volatilities on Dole PLC and Forafric Global 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 Dole PLC with a short position of Forafric Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dole PLC and Forafric Global.
Diversification Opportunities for Dole PLC and Forafric Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dole and Forafric is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dole PLC and Forafric Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forafric Global PLC and Dole PLC 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 Dole PLC are associated (or correlated) with Forafric Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forafric Global PLC has no effect on the direction of Dole PLC i.e., Dole PLC and Forafric Global go up and down completely randomly.
Pair Corralation between Dole PLC and Forafric Global
Given the investment horizon of 90 days Dole PLC is expected to generate 1.32 times more return on investment than Forafric Global. However, Dole PLC is 1.32 times more volatile than Forafric Global PLC. It trades about -0.01 of its potential returns per unit of risk. Forafric Global PLC is currently generating about -0.3 per unit of risk. If you would invest 1,362 in Dole PLC on October 26, 2024 and sell it today you would lose (10.00) from holding Dole PLC or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dole PLC vs. Forafric Global PLC
Performance |
| Timeline |
| Dole PLC |
| Forafric Global PLC |
Dole PLC and Forafric Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dole PLC and Forafric Global
The main advantage of trading using opposite Dole PLC and Forafric Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dole PLC position performs unexpectedly, Forafric Global 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 Forafric Global will offset losses from the drop in Forafric Global's long position.| Dole PLC vs. Limoneira Co | Dole PLC vs. Alico Inc | Dole PLC vs. Adecoagro SA | Dole PLC vs. Cal Maine Foods |
| Forafric Global vs. Forafric Global PLC | Forafric Global vs. GrainCorp Limited | Forafric Global vs. Australian Agricultural | Forafric Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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