Correlation Between Edible Garden and Limoneira
Can any of the company-specific risk be diversified away by investing in both Edible Garden and Limoneira 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 Limoneira 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 Limoneira Co, you can compare the effects of market volatilities on Edible Garden and Limoneira 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 Limoneira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edible Garden and Limoneira.
Diversification Opportunities for Edible Garden and Limoneira
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Edible and Limoneira is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Edible Garden AG and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira 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 Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of Edible Garden i.e., Edible Garden and Limoneira go up and down completely randomly.
Pair Corralation between Edible Garden and Limoneira
Assuming the 90 days horizon Edible Garden AG is expected to generate 13.9 times more return on investment than Limoneira. However, Edible Garden is 13.9 times more volatile than Limoneira Co. It trades about 0.05 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.14 per unit of risk. If you would invest 6.00 in Edible Garden AG on October 28, 2024 and sell it today you would lose (1.92) from holding Edible Garden AG or give up 32.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edible Garden AG vs. Limoneira Co
Performance |
| Timeline |
| Edible Garden AG |
| Limoneira |
Edible Garden and Limoneira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edible Garden and Limoneira
The main advantage of trading using opposite Edible Garden and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edible Garden position performs unexpectedly, Limoneira 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 Limoneira will offset losses from the drop in Limoneira's long position.| Edible Garden vs. Edible Garden AG | Edible Garden vs. Dermata Therapeutics Warrant | Edible Garden vs. Iveda Solutions Warrant | Edible Garden vs. Aclarion |
| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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