Correlation Between Fresh Del and Bunge
Can any of the company-specific risk be diversified away by investing in both Fresh Del and Bunge 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 Bunge 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 Bunge Limited, you can compare the effects of market volatilities on Fresh Del and Bunge 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 Bunge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and Bunge.
Diversification Opportunities for Fresh Del and Bunge
Very good diversification
The 3 months correlation between Fresh and Bunge is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited 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 Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of Fresh Del i.e., Fresh Del and Bunge go up and down completely randomly.
Pair Corralation between Fresh Del and Bunge
Considering the 90-day investment horizon Fresh Del Monte is expected to under-perform the Bunge. But the stock apears to be less risky and, when comparing its historical volatility, Fresh Del Monte is 1.02 times less risky than Bunge. The stock trades about -0.14 of its potential returns per unit of risk. The Bunge Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,792 in Bunge Limited on October 20, 2024 and sell it today you would earn a total of 162.00 from holding Bunge Limited or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Del Monte vs. Bunge Limited
Performance |
| Timeline |
| Fresh Del Monte |
| Bunge Limited |
Fresh Del and Bunge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Del and Bunge
The main advantage of trading using opposite Fresh Del and Bunge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del position performs unexpectedly, Bunge 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 Bunge will offset losses from the drop in Bunge's long position.| Fresh Del vs. Alico Inc | Fresh Del vs. SW Seed Company | Fresh Del vs. Adecoagro SA | Fresh Del vs. Brasilagro Adr |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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