Correlation Between NYSE Composite and Edible Garden
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Edible Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Edible Garden AG, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Edible Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Edible Garden.
Diversification Opportunities for NYSE Composite and Edible Garden
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Edible is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Edible Garden go up and down completely randomly.
Pair Corralation between NYSE Composite and Edible Garden
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.08 times more return on investment than Edible Garden. However, NYSE Composite is 13.21 times less risky than Edible Garden. It trades about 0.07 of its potential returns per unit of risk. Edible Garden AG is currently generating about -0.08 per unit of risk. If you would invest 1,605,225 in NYSE Composite on November 4, 2024 and sell it today you would earn a total of 394,657 from holding NYSE Composite or generate 24.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Edible Garden AG
Performance |
| Timeline |
NYSE Composite and Edible Garden Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Edible Garden AG
Pair trading matchups for Edible Garden
Pair Trading with NYSE Composite and Edible Garden
The main advantage of trading using opposite NYSE Composite and Edible Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Aris Water Solutions | NYSE Composite vs. Marfrig Global Foods | NYSE Composite vs. CenterPoint Energy | NYSE Composite vs. Sysco |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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