Correlation Between Edible Garden and CHS
Can any of the company-specific risk be diversified away by investing in both Edible Garden and CHS 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 CHS 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 CHS Inc Pref, you can compare the effects of market volatilities on Edible Garden and CHS 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 CHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and CHS.
Diversification Opportunities for Edible Garden and CHS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edible and CHS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and CHS Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHS Inc Pref 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 CHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHS Inc Pref has no effect on the direction of Edible Garden i.e., Edible Garden and CHS go up and down completely randomly.
Pair Corralation between Edible Garden and CHS
Given the investment horizon of 90 days Edible Garden AG is expected to under-perform the CHS. In addition to that, Edible Garden is 15.04 times more volatile than CHS Inc Pref. It trades about -0.11 of its total potential returns per unit of risk. CHS Inc Pref is currently generating about 0.07 per unit of volatility. If you would invest 2,296 in CHS Inc Pref on August 31, 2024 and sell it today you would earn a total of 389.00 from holding CHS Inc Pref or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edible Garden AG vs. CHS Inc Pref
Performance |
| Timeline |
| Edible Garden AG |
| CHS Inc Pref |
Edible Garden and CHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and CHS
The main advantage of trading using opposite Edible Garden and CHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, CHS 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 CHS will offset losses from the drop in CHS'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 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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