Correlation Between Farmmi and Planet Green
Can any of the company-specific risk be diversified away by investing in both Farmmi and Planet Green 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 Farmmi and Planet Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmmi Inc and Planet Green Holdings, you can compare the effects of market volatilities on Farmmi and Planet Green 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 Farmmi with a short position of Planet Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmmi and Planet Green.
Diversification Opportunities for Farmmi and Planet Green
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Farmmi and Planet is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Farmmi Inc and Planet Green Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Green Holdings and Farmmi 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 Farmmi Inc are associated (or correlated) with Planet Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Green Holdings has no effect on the direction of Farmmi i.e., Farmmi and Planet Green go up and down completely randomly.
Pair Corralation between Farmmi and Planet Green
Given the investment horizon of 90 days Farmmi Inc is expected to under-perform the Planet Green. In addition to that, Farmmi is 1.2 times more volatile than Planet Green Holdings. It trades about -0.14 of its total potential returns per unit of risk. Planet Green Holdings is currently generating about 0.07 per unit of volatility. If you would invest 250.00 in Planet Green Holdings on November 2, 2024 and sell it today you would earn a total of 11.00 from holding Planet Green Holdings or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmmi Inc vs. Planet Green Holdings
Performance |
| Timeline |
| Farmmi Inc |
| Planet Green Holdings |
Farmmi and Planet Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmmi and Planet Green
The main advantage of trading using opposite Farmmi and Planet Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmmi position performs unexpectedly, Planet Green 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 Planet Green will offset losses from the drop in Planet Green's long position.| Farmmi vs. Bit Origin | Farmmi vs. Better Choice | Farmmi vs. Laird Superfood | Farmmi vs. Arcadia Biosciences |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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