Correlation Between Local Bounti and Atlantic Sapphire
Can any of the company-specific risk be diversified away by investing in both Local Bounti and Atlantic Sapphire 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 Local Bounti and Atlantic Sapphire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Local Bounti Corp and Atlantic Sapphire ASA, you can compare the effects of market volatilities on Local Bounti and Atlantic Sapphire 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 Local Bounti with a short position of Atlantic Sapphire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Local Bounti and Atlantic Sapphire.
Diversification Opportunities for Local Bounti and Atlantic Sapphire
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Local and Atlantic is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Local Bounti Corp and Atlantic Sapphire ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantic Sapphire ASA and Local Bounti 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 Local Bounti Corp are associated (or correlated) with Atlantic Sapphire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantic Sapphire ASA has no effect on the direction of Local Bounti i.e., Local Bounti and Atlantic Sapphire go up and down completely randomly.
Pair Corralation between Local Bounti and Atlantic Sapphire
Given the investment horizon of 90 days Local Bounti is expected to generate 293.05 times less return on investment than Atlantic Sapphire. But when comparing it to its historical volatility, Local Bounti Corp is 82.35 times less risky than Atlantic Sapphire. It trades about 0.06 of its potential returns per unit of risk. Atlantic Sapphire ASA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 238.00 in Atlantic Sapphire ASA on October 26, 2024 and sell it today you would lose (98.00) from holding Atlantic Sapphire ASA or give up 41.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Local Bounti Corp vs. Atlantic Sapphire ASA
Performance |
| Timeline |
| Local Bounti Corp |
| Atlantic Sapphire ASA |
Local Bounti and Atlantic Sapphire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Local Bounti and Atlantic Sapphire
The main advantage of trading using opposite Local Bounti and Atlantic Sapphire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Local Bounti position performs unexpectedly, Atlantic Sapphire 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 Atlantic Sapphire will offset losses from the drop in Atlantic Sapphire's long position.| Local Bounti vs. Fresh Del Monte | Local Bounti vs. Alico Inc | Local Bounti vs. SW Seed Company | Local Bounti vs. Adecoagro SA |
| Atlantic Sapphire vs. Forafric Global PLC | Atlantic Sapphire vs. Forafric Global PLC | Atlantic Sapphire vs. GrainCorp Limited | Atlantic Sapphire vs. Australian Agricultural |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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