Correlation Between Limoneira and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Limoneira and Adecoagro 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 Limoneira and Adecoagro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and Adecoagro SA, you can compare the effects of market volatilities on Limoneira and Adecoagro 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 Limoneira with a short position of Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and Adecoagro.
Diversification Opportunities for Limoneira and Adecoagro
Very weak diversification
The 3 months correlation between Limoneira and Adecoagro is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA and Limoneira 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 Limoneira Co are associated (or correlated) with Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Limoneira i.e., Limoneira and Adecoagro go up and down completely randomly.
Pair Corralation between Limoneira and Adecoagro
Given the investment horizon of 90 days Limoneira Co is expected to generate 1.07 times more return on investment than Adecoagro. However, Limoneira is 1.07 times more volatile than Adecoagro SA. It trades about 0.12 of its potential returns per unit of risk. Adecoagro SA is currently generating about 0.06 per unit of risk. If you would invest 2,019 in Limoneira Co on August 24, 2024 and sell it today you would earn a total of 733.00 from holding Limoneira Co or generate 36.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limoneira Co vs. Adecoagro SA
Performance |
| Timeline |
| Limoneira |
| Adecoagro SA |
Limoneira and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and Adecoagro
The main advantage of trading using opposite Limoneira and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro's long position.| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
| Adecoagro vs. Limoneira Co | Adecoagro vs. Dole PLC | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine Foods |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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