Correlation Between Limoneira and Pardee Resources
Can any of the company-specific risk be diversified away by investing in both Limoneira and Pardee Resources 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 Pardee Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and Pardee Resources Co, you can compare the effects of market volatilities on Limoneira and Pardee Resources 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 Pardee Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and Pardee Resources.
Diversification Opportunities for Limoneira and Pardee Resources
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Limoneira and Pardee is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Pardee Resources Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pardee 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 Pardee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pardee Resources has no effect on the direction of Limoneira i.e., Limoneira and Pardee Resources go up and down completely randomly.
Pair Corralation between Limoneira and Pardee Resources
Given the investment horizon of 90 days Limoneira Co is expected to generate 1.54 times more return on investment than Pardee Resources. However, Limoneira is 1.54 times more volatile than Pardee Resources Co. It trades about 0.13 of its potential returns per unit of risk. Pardee Resources Co is currently generating about 0.12 per unit of risk. If you would invest 1,989 in Limoneira Co on August 29, 2024 and sell it today you would earn a total of 773.00 from holding Limoneira Co or generate 38.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Limoneira Co vs. Pardee Resources Co
Performance |
| Timeline |
| Limoneira |
| Pardee Resources |
Limoneira and Pardee Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and Pardee Resources
The main advantage of trading using opposite Limoneira and Pardee Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, Pardee Resources 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 Pardee Resources will offset losses from the drop in Pardee Resources' long position.| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
| Pardee Resources vs. Expro Group Holdings | Pardee Resources vs. ChampionX | Pardee Resources vs. Ranger Energy Services | Pardee Resources vs. Cactus Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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