Correlation Between Edible Garden and Laird Superfood
Can any of the company-specific risk be diversified away by investing in both Edible Garden and Laird Superfood 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 Laird Superfood 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 Laird Superfood, you can compare the effects of market volatilities on Edible Garden and Laird Superfood 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 Laird Superfood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Laird Superfood.
Diversification Opportunities for Edible Garden and Laird Superfood
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edible and Laird is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Laird Superfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laird Superfood 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 Laird Superfood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laird Superfood has no effect on the direction of Edible Garden i.e., Edible Garden and Laird Superfood go up and down completely randomly.
Pair Corralation between Edible Garden and Laird Superfood
Given the investment horizon of 90 days Edible Garden AG is expected to under-perform the Laird Superfood. But the stock apears to be less risky and, when comparing its historical volatility, Edible Garden AG is 1.03 times less risky than Laird Superfood. The stock trades about -0.12 of its potential returns per unit of risk. The Laird Superfood is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 568.00 in Laird Superfood on August 24, 2024 and sell it today you would earn a total of 269.00 from holding Laird Superfood or generate 47.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edible Garden AG vs. Laird Superfood
Performance |
| Timeline |
| Edible Garden AG |
| Laird Superfood |
Edible Garden and Laird Superfood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and Laird Superfood
The main advantage of trading using opposite Edible Garden and Laird Superfood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, Laird Superfood 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 Laird Superfood will offset losses from the drop in Laird Superfood'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 |
| Laird Superfood vs. Bellring Brands LLC | Laird Superfood vs. Treehouse Foods | Laird Superfood vs. Ingredion Incorporated | Laird Superfood vs. JM Smucker |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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