Correlation Between Limoneira and Bon Natural
Can any of the company-specific risk be diversified away by investing in both Limoneira and Bon Natural 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 Bon Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and Bon Natural Life, you can compare the effects of market volatilities on Limoneira and Bon Natural 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 Bon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and Bon Natural.
Diversification Opportunities for Limoneira and Bon Natural
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Limoneira and Bon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Bon Natural Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bon Natural Life 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 Bon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bon Natural Life has no effect on the direction of Limoneira i.e., Limoneira and Bon Natural go up and down completely randomly.
Pair Corralation between Limoneira and Bon Natural
Given the investment horizon of 90 days Limoneira is expected to generate 1.68 times less return on investment than Bon Natural. But when comparing it to its historical volatility, Limoneira Co is 1.63 times less risky than Bon Natural. It trades about 0.09 of its potential returns per unit of risk. Bon Natural Life is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Bon Natural Life on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Bon Natural Life or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limoneira Co vs. Bon Natural Life
Performance |
| Timeline |
| Limoneira |
| Bon Natural Life |
Limoneira and Bon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and Bon Natural
The main advantage of trading using opposite Limoneira and Bon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, Bon Natural 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 Bon Natural will offset losses from the drop in Bon Natural's long position.| Limoneira vs. Lancaster Colony | Limoneira vs. Treehouse Foods | Limoneira vs. John B Sanfilippo | Limoneira vs. Seneca Foods Corp |
| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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