Correlation Between Flowers Foods and Farmmi
Can any of the company-specific risk be diversified away by investing in both Flowers Foods and Farmmi 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 Flowers Foods and Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and Farmmi Inc, you can compare the effects of market volatilities on Flowers Foods and Farmmi 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 Flowers Foods with a short position of Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and Farmmi.
Diversification Opportunities for Flowers Foods and Farmmi
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flowers and Farmmi is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc and Flowers Foods 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 Flowers Foods are associated (or correlated) with Farmmi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmmi Inc has no effect on the direction of Flowers Foods i.e., Flowers Foods and Farmmi go up and down completely randomly.
Pair Corralation between Flowers Foods and Farmmi
Considering the 90-day investment horizon Flowers Foods is expected to generate 0.22 times more return on investment than Farmmi. However, Flowers Foods is 4.61 times less risky than Farmmi. It trades about -0.03 of its potential returns per unit of risk. Farmmi Inc is currently generating about -0.06 per unit of risk. If you would invest 2,812 in Flowers Foods on August 26, 2024 and sell it today you would lose (569.00) from holding Flowers Foods or give up 20.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flowers Foods vs. Farmmi Inc
Performance |
| Timeline |
| Flowers Foods |
| Farmmi Inc |
Flowers Foods and Farmmi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowers Foods and Farmmi
The main advantage of trading using opposite Flowers Foods and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods position performs unexpectedly, Farmmi 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 Farmmi will offset losses from the drop in Farmmi's long position.| Flowers Foods vs. ConAgra Foods | Flowers Foods vs. McCormick Company Incorporated | Flowers Foods vs. Campbell Soup | Flowers Foods vs. Kellanova |
| Farmmi vs. Bellring Brands LLC | Farmmi vs. Ingredion Incorporated | Farmmi vs. Nomad Foods | Farmmi vs. Post Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |