Correlation Between Limoneira and AquaBounty Technologies
Can any of the company-specific risk be diversified away by investing in both Limoneira and AquaBounty Technologies 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 AquaBounty Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and AquaBounty Technologies, you can compare the effects of market volatilities on Limoneira and AquaBounty Technologies 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 AquaBounty Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and AquaBounty Technologies.
Diversification Opportunities for Limoneira and AquaBounty Technologies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Limoneira and AquaBounty is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and AquaBounty Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AquaBounty Technologies 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 AquaBounty Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AquaBounty Technologies has no effect on the direction of Limoneira i.e., Limoneira and AquaBounty Technologies go up and down completely randomly.
Pair Corralation between Limoneira and AquaBounty Technologies
Given the investment horizon of 90 days Limoneira Co is expected to generate 0.45 times more return on investment than AquaBounty Technologies. However, Limoneira Co is 2.21 times less risky than AquaBounty Technologies. It trades about 0.1 of its potential returns per unit of risk. AquaBounty Technologies is currently generating about -0.07 per unit of risk. If you would invest 2,086 in Limoneira Co on September 3, 2024 and sell it today you would earn a total of 694.00 from holding Limoneira Co or generate 33.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limoneira Co vs. AquaBounty Technologies
Performance |
| Timeline |
| Limoneira |
| AquaBounty Technologies |
Limoneira and AquaBounty Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and AquaBounty Technologies
The main advantage of trading using opposite Limoneira and AquaBounty Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, AquaBounty Technologies 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 AquaBounty Technologies will offset losses from the drop in AquaBounty Technologies' long position.| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
| AquaBounty Technologies vs. Atlantic Sapphire ASA | AquaBounty Technologies vs. Adecoagro SA | AquaBounty Technologies vs. Local Bounti Corp | AquaBounty Technologies vs. Forafric Global PLC |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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