Correlation Between Edible Garden and AppHarvest
Can any of the company-specific risk be diversified away by investing in both Edible Garden and AppHarvest 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 AppHarvest 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 AppHarvest, you can compare the effects of market volatilities on Edible Garden and AppHarvest 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 AppHarvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and AppHarvest.
Diversification Opportunities for Edible Garden and AppHarvest
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Edible and AppHarvest is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest 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 AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of Edible Garden i.e., Edible Garden and AppHarvest go up and down completely randomly.
Pair Corralation between Edible Garden and AppHarvest
Assuming the 90 days horizon Edible Garden AG is expected to generate 8.16 times more return on investment than AppHarvest. However, Edible Garden is 8.16 times more volatile than AppHarvest. It trades about 0.13 of its potential returns per unit of risk. AppHarvest is currently generating about -0.04 per unit of risk. If you would invest 21.00 in Edible Garden AG on September 2, 2024 and sell it today you would lose (19.74) from holding Edible Garden AG or give up 94.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 36.84% |
| Values | Daily Returns |
Edible Garden AG vs. AppHarvest
Performance |
| Timeline |
| Edible Garden AG |
| AppHarvest |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Edible Garden and AppHarvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and AppHarvest
The main advantage of trading using opposite Edible Garden and AppHarvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, AppHarvest 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 AppHarvest will offset losses from the drop in AppHarvest's long position.| Edible Garden vs. Edible Garden AG | Edible Garden vs. Iveda Solutions Warrant | Edible Garden vs. Aclarion |
| AppHarvest vs. Porch Group | AppHarvest vs. Hydrofarm Holdings Group | AppHarvest vs. Danimer Scientific | AppHarvest vs. Open Lending Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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