Correlation Between Limoneira and Edible Garden
Can any of the company-specific risk be diversified away by investing in both Limoneira and Edible Garden 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 Edible Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and Edible Garden AG, you can compare the effects of market volatilities on Limoneira and Edible Garden 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 Edible Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and Edible Garden.
Diversification Opportunities for Limoneira and Edible Garden
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Limoneira and Edible is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Edible Garden AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edible Garden AG 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 Edible Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edible Garden AG has no effect on the direction of Limoneira i.e., Limoneira and Edible Garden go up and down completely randomly.
Pair Corralation between Limoneira and Edible Garden
Given the investment horizon of 90 days Limoneira Co is expected to under-perform the Edible Garden. But the stock apears to be less risky and, when comparing its historical volatility, Limoneira Co is 4.0 times less risky than Edible Garden. The stock trades about -0.07 of its potential returns per unit of risk. The Edible Garden AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Edible Garden AG on October 26, 2024 and sell it today you would lose (1.21) from holding Edible Garden AG or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Limoneira Co vs. Edible Garden AG
Performance |
| Timeline |
| Limoneira |
| Edible Garden AG |
Limoneira and Edible Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and Edible Garden
The main advantage of trading using opposite Limoneira and Edible Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, Edible Garden 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 Edible Garden will offset losses from the drop in Edible Garden's long position.| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
| Edible Garden vs. Golden Agri Resources | Edible Garden vs. Vital Farms | Edible Garden vs. Local Bounti Corp | Edible Garden vs. Fresh Del Monte |
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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