Correlation Between Edible Garden and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Edible Garden and Sendas Distribuidora 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 Edible Garden and Sendas Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edible Garden AG and Sendas Distribuidora SA, you can compare the effects of market volatilities on Edible Garden and Sendas Distribuidora 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 Edible Garden with a short position of Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Sendas Distribuidora.
Diversification Opportunities for Edible Garden and Sendas Distribuidora
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edible and Sendas is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora and Edible Garden 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 Edible Garden AG are associated (or correlated) with Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Edible Garden i.e., Edible Garden and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Edible Garden and Sendas Distribuidora
Given the investment horizon of 90 days Edible Garden AG is expected to under-perform the Sendas Distribuidora. In addition to that, Edible Garden is 3.02 times more volatile than Sendas Distribuidora SA. It trades about -0.08 of its total potential returns per unit of risk. Sendas Distribuidora SA is currently generating about -0.08 per unit of volatility. If you would invest 1,823 in Sendas Distribuidora SA on November 9, 2024 and sell it today you would lose (1,363) from holding Sendas Distribuidora SA or give up 74.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.55% |
| Values | Daily Returns |
Edible Garden AG vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Edible Garden AG |
| Sendas Distribuidora |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Edible Garden and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and Sendas Distribuidora
The main advantage of trading using opposite Edible Garden and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, Sendas Distribuidora 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 Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora's long position.| Edible Garden vs. Golden Agri Resources | Edible Garden vs. Vital Farms | Edible Garden vs. Local Bounti Corp | Edible Garden vs. Fresh Del Monte |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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