Correlation Between Whole Earth and Planting Hope

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Can any of the company-specific risk be diversified away by investing in both Whole Earth and Planting Hope 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 Planting Hope 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 The Planting Hope, you can compare the effects of market volatilities on Whole Earth and Planting Hope 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 Planting Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Earth and Planting Hope.

Diversification Opportunities for Whole Earth and Planting Hope

WholePlantingDiversified AwayWholePlantingDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Whole and Planting is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands and The Planting Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planting Hope 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 Planting Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planting Hope has no effect on the direction of Whole Earth i.e., Whole Earth and Planting Hope go up and down completely randomly.

Pair Corralation between Whole Earth and Planting Hope

If you would invest  0.02  in The Planting Hope on December 3, 2024 and sell it today you would earn a total of  1.50  from holding The Planting Hope or generate 7500.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Whole Earth Brands  vs.  The Planting Hope

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0200400600800
JavaScript chart by amCharts 3.21.15FREE MYLKF
       Timeline  
Whole Earth Brands 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Whole Earth Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Whole Earth is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Planting Hope 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in The Planting Hope are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking signals, Planting Hope reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar0.00010.0010.01

Whole Earth and Planting Hope Volatility Contrast

   Predicted Return Density   
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JavaScript chart by amCharts 3.21.15FREE MYLKF
       Returns  

Pair Trading with Whole Earth and Planting Hope

The main advantage of trading using opposite Whole Earth and Planting Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Earth position performs unexpectedly, Planting Hope 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 Planting Hope will offset losses from the drop in Planting Hope's long position.
The idea behind Whole Earth Brands and The Planting Hope 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.
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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