Correlation Between Whole Earth and Nates Food
Can any of the company-specific risk be diversified away by investing in both Whole Earth and Nates Food 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 Nates Food 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 Nates Food Co, you can compare the effects of market volatilities on Whole Earth and Nates Food 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 Nates Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Earth and Nates Food.
Diversification Opportunities for Whole Earth and Nates Food
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Whole and Nates is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands and Nates Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nates Food 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 Nates Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nates Food has no effect on the direction of Whole Earth i.e., Whole Earth and Nates Food go up and down completely randomly.
Pair Corralation between Whole Earth and Nates Food
Given the investment horizon of 90 days Whole Earth Brands is expected to under-perform the Nates Food. But the stock apears to be less risky and, when comparing its historical volatility, Whole Earth Brands is 2.3 times less risky than Nates Food. The stock trades about -0.04 of its potential returns per unit of risk. The Nates Food Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 0.10 in Nates Food Co on September 1, 2024 and sell it today you would lose (0.10) from holding Nates Food Co or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 70.26% |
| Values | Daily Returns |
Whole Earth Brands vs. Nates Food Co
Performance |
| Timeline |
| Whole Earth Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nates Food |
Whole Earth and Nates Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whole Earth and Nates Food
The main advantage of trading using opposite Whole Earth and Nates Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Earth position performs unexpectedly, Nates Food 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 Nates Food will offset losses from the drop in Nates Food'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 |
| Nates Food vs. The A2 Milk | Nates Food vs. Altavoz Entertainment | Nates Food vs. Artisan Consumer Goods | Nates Food vs. General Mills |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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