Correlation Between Limoneira and Golden Agri
Can any of the company-specific risk be diversified away by investing in both Limoneira and Golden Agri 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 Golden Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and Golden Agri Resources, you can compare the effects of market volatilities on Limoneira and Golden Agri 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 Golden Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and Golden Agri.
Diversification Opportunities for Limoneira and Golden Agri
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Limoneira and Golden is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources 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 Golden Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Limoneira i.e., Limoneira and Golden Agri go up and down completely randomly.
Pair Corralation between Limoneira and Golden Agri
Given the investment horizon of 90 days Limoneira Co is expected to generate 1.81 times more return on investment than Golden Agri. However, Limoneira is 1.81 times more volatile than Golden Agri Resources. It trades about 0.0 of its potential returns per unit of risk. Golden Agri Resources is currently generating about -0.31 per unit of risk. If you would invest 2,671 in Limoneira Co on August 24, 2024 and sell it today you would lose (17.00) from holding Limoneira Co or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limoneira Co vs. Golden Agri Resources
Performance |
| Timeline |
| Limoneira |
| Golden Agri Resources |
Limoneira and Golden Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and Golden Agri
The main advantage of trading using opposite Limoneira and Golden Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, Golden Agri 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 Golden Agri will offset losses from the drop in Golden Agri's long position.| Limoneira vs. Alico Inc | Limoneira vs. SW Seed Company | Limoneira vs. Adecoagro SA | Limoneira vs. Tyson Foods |
| Golden Agri vs. Avi Ltd ADR | Golden Agri vs. Altavoz Entertainment | Golden Agri vs. The a2 Milk | Golden Agri vs. Aryzta AG PK |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |