Correlation Between Limoneira and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Limoneira and Wilmar International 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 Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Limoneira Co and Wilmar International, you can compare the effects of market volatilities on Limoneira and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Limoneira and Wilmar International.
Diversification Opportunities for Limoneira and Wilmar International
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Limoneira and Wilmar is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Limoneira i.e., Limoneira and Wilmar International go up and down completely randomly.
Pair Corralation between Limoneira and Wilmar International
Given the investment horizon of 90 days Limoneira Co is expected to under-perform the Wilmar International. In addition to that, Limoneira is 1.97 times more volatile than Wilmar International. It trades about -0.18 of its total potential returns per unit of risk. Wilmar International is currently generating about -0.06 per unit of volatility. If you would invest 2,342 in Wilmar International on November 2, 2024 and sell it today you would lose (72.00) from holding Wilmar International or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Limoneira Co vs. Wilmar International
Performance |
| Timeline |
| Limoneira |
| Wilmar International |
Limoneira and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Limoneira and Wilmar International
The main advantage of trading using opposite Limoneira and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Limoneira position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
| Wilmar International vs. Wilmar International Limited | Wilmar International vs. Wesfarmers Ltd ADR | Wilmar International vs. United Overseas Bank | Wilmar International vs. Kerry Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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