Correlation Between Dole PLC and Seaboard
Can any of the company-specific risk be diversified away by investing in both Dole PLC and Seaboard 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 Seaboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dole PLC and Seaboard, you can compare the effects of market volatilities on Dole PLC and Seaboard 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 Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dole PLC and Seaboard.
Diversification Opportunities for Dole PLC and Seaboard
Poor diversification
The 3 months correlation between Dole and Seaboard is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dole PLC and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard 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 Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of Dole PLC i.e., Dole PLC and Seaboard go up and down completely randomly.
Pair Corralation between Dole PLC and Seaboard
Given the investment horizon of 90 days Dole PLC is expected to generate 1.18 times more return on investment than Seaboard. However, Dole PLC is 1.18 times more volatile than Seaboard. It trades about 0.04 of its potential returns per unit of risk. Seaboard is currently generating about -0.06 per unit of risk. If you would invest 1,017 in Dole PLC on October 20, 2024 and sell it today you would earn a total of 306.00 from holding Dole PLC or generate 30.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dole PLC vs. Seaboard
Performance |
| Timeline |
| Dole PLC |
| Seaboard |
Dole PLC and Seaboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dole PLC and Seaboard
The main advantage of trading using opposite Dole PLC and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dole PLC position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.| Dole PLC vs. Limoneira Co | Dole PLC vs. Alico Inc | Dole PLC vs. Adecoagro SA | Dole PLC vs. Cal Maine Foods |
| Seaboard vs. White Mountains Insurance | Seaboard vs. Cable One | Seaboard vs. NVR Inc | Seaboard vs. Alexanders |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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