Correlation Between Whole Earth and Farmmi
Can any of the company-specific risk be diversified away by investing in both Whole Earth 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 Whole Earth and Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whole Earth Brands and Farmmi Inc, you can compare the effects of market volatilities on Whole Earth 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 Whole Earth with a short position of Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Earth and Farmmi.
Diversification Opportunities for Whole Earth and Farmmi
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Whole and Farmmi is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc and Whole Earth 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 Whole Earth Brands 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 Whole Earth i.e., Whole Earth and Farmmi go up and down completely randomly.
Pair Corralation between Whole Earth and Farmmi
If you would invest 27.00 in Farmmi Inc on October 20, 2024 and sell it today you would earn a total of 3.00 from holding Farmmi Inc or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Whole Earth Brands vs. Farmmi Inc
Performance |
| Timeline |
| Whole Earth Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Farmmi Inc |
Whole Earth and Farmmi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whole Earth and Farmmi
The main advantage of trading using opposite Whole Earth and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Earth 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.| Whole Earth vs. Seneca Foods Corp | Whole Earth vs. Lifeway Foods | Whole Earth vs. John B Sanfilippo | Whole Earth vs. Real Good Food |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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