Correlation Between Fresh Del and American Aires
Can any of the company-specific risk be diversified away by investing in both Fresh Del and American Aires 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 Fresh Del and American Aires into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Del Monte and American Aires, you can compare the effects of market volatilities on Fresh Del and American Aires 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 Fresh Del with a short position of American Aires. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and American Aires.
Diversification Opportunities for Fresh Del and American Aires
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresh and American is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and American Aires in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Aires and Fresh Del 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 Fresh Del Monte are associated (or correlated) with American Aires. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Aires has no effect on the direction of Fresh Del i.e., Fresh Del and American Aires go up and down completely randomly.
Pair Corralation between Fresh Del and American Aires
Considering the 90-day investment horizon Fresh Del Monte is expected to generate 0.26 times more return on investment than American Aires. However, Fresh Del Monte is 3.8 times less risky than American Aires. It trades about 0.07 of its potential returns per unit of risk. American Aires is currently generating about -0.03 per unit of risk. If you would invest 2,904 in Fresh Del Monte on October 26, 2024 and sell it today you would earn a total of 206.00 from holding Fresh Del Monte or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Fresh Del Monte vs. American Aires
Performance |
| Timeline |
| Fresh Del Monte |
| American Aires |
Fresh Del and American Aires Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Del and American Aires
The main advantage of trading using opposite Fresh Del and American Aires positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del position performs unexpectedly, American Aires 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 American Aires will offset losses from the drop in American Aires' long position.| Fresh Del vs. Alico Inc | Fresh Del vs. SW Seed Company | Fresh Del vs. Adecoagro SA | Fresh Del vs. Brasilagro Adr |
| American Aires vs. alpha En | American Aires vs. Alps Electric Co | American Aires vs. Bitmine Immersion Technologies | American Aires vs. AT S Austria |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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