Correlation Between Farmmi and Tattooed Chef
Can any of the company-specific risk be diversified away by investing in both Farmmi and Tattooed Chef 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 Tattooed Chef into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmmi Inc and Tattooed Chef, you can compare the effects of market volatilities on Farmmi and Tattooed Chef 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 Tattooed Chef. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmmi and Tattooed Chef.
Diversification Opportunities for Farmmi and Tattooed Chef
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Farmmi and Tattooed is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Farmmi Inc and Tattooed Chef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tattooed Chef 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 Tattooed Chef. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tattooed Chef has no effect on the direction of Farmmi i.e., Farmmi and Tattooed Chef go up and down completely randomly.
Pair Corralation between Farmmi and Tattooed Chef
If you would invest 20.00 in Farmmi Inc on September 4, 2024 and sell it today you would earn a total of 10.00 from holding Farmmi Inc or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Farmmi Inc vs. Tattooed Chef
Performance |
| Timeline |
| Farmmi Inc |
| Tattooed Chef |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Farmmi and Tattooed Chef Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmmi and Tattooed Chef
The main advantage of trading using opposite Farmmi and Tattooed Chef positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmmi position performs unexpectedly, Tattooed Chef 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 Tattooed Chef will offset losses from the drop in Tattooed Chef's long position.The idea behind Farmmi Inc and Tattooed Chef pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tattooed Chef vs. Kraft Heinz Co | Tattooed Chef vs. Hormel Foods | Tattooed Chef vs. Kellanova | Tattooed Chef vs. Blue Star 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |