Correlation Between Edible Garden and Dole PLC
Can any of the company-specific risk be diversified away by investing in both Edible Garden and Dole PLC 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 Dole PLC 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 Dole PLC, you can compare the effects of market volatilities on Edible Garden and Dole PLC 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 Dole PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Dole PLC.
Diversification Opportunities for Edible Garden and Dole PLC
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edible and Dole is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Dole PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dole PLC 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 Dole PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dole PLC has no effect on the direction of Edible Garden i.e., Edible Garden and Dole PLC go up and down completely randomly.
Pair Corralation between Edible Garden and Dole PLC
Given the investment horizon of 90 days Edible Garden AG is expected to generate 13.37 times more return on investment than Dole PLC. However, Edible Garden is 13.37 times more volatile than Dole PLC. It trades about 0.25 of its potential returns per unit of risk. Dole PLC is currently generating about -0.13 per unit of risk. If you would invest 14.00 in Edible Garden AG on October 20, 2024 and sell it today you would earn a total of 14.00 from holding Edible Garden AG or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edible Garden AG vs. Dole PLC
Performance |
| Timeline |
| Edible Garden AG |
| Dole PLC |
Edible Garden and Dole PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and Dole PLC
The main advantage of trading using opposite Edible Garden and Dole PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, Dole PLC 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 Dole PLC will offset losses from the drop in Dole PLC'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 |
| Dole PLC vs. Limoneira Co | Dole PLC vs. Alico Inc | Dole PLC vs. Adecoagro SA | Dole PLC vs. Cal Maine Foods |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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