Correlation Between Real Good and Farmmi
Can any of the company-specific risk be diversified away by investing in both Real Good and Farmmi 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 Real Good and Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and Farmmi Inc, you can compare the effects of market volatilities on Real Good and Farmmi 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 Real Good with a short position of Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and Farmmi.
Diversification Opportunities for Real Good and Farmmi
Very good diversification
The 3 months correlation between Real and Farmmi is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc and Real Good 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 Real Good Food are associated (or correlated) with Farmmi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmmi Inc has no effect on the direction of Real Good i.e., Real Good and Farmmi go up and down completely randomly.
Pair Corralation between Real Good and Farmmi
Considering the 90-day investment horizon Real Good Food is expected to under-perform the Farmmi. In addition to that, Real Good is 1.19 times more volatile than Farmmi Inc. It trades about -0.06 of its total potential returns per unit of risk. Farmmi Inc is currently generating about -0.06 per unit of volatility. If you would invest 432.00 in Farmmi Inc on August 29, 2024 and sell it today you would lose (403.00) from holding Farmmi Inc or give up 93.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Good Food vs. Farmmi Inc
Performance |
| Timeline |
| Real Good Food |
| Farmmi Inc |
Real Good and Farmmi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and Farmmi
The main advantage of trading using opposite Real Good and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good position performs unexpectedly, Farmmi 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 Farmmi will offset losses from the drop in Farmmi's long position.| Real Good vs. Seneca Foods Corp | Real Good vs. Central Garden Pet | Real Good vs. Central Garden Pet | Real Good vs. Natures Sunshine Products |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |