Correlation Between SLC Agricola and Limoneira
Can any of the company-specific risk be diversified away by investing in both SLC Agricola and Limoneira 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 SLC Agricola and Limoneira into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SLC Agricola SA and Limoneira Co, you can compare the effects of market volatilities on SLC Agricola and Limoneira 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 SLC Agricola with a short position of Limoneira. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLC Agricola and Limoneira.
Diversification Opportunities for SLC Agricola and Limoneira
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SLC and Limoneira is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SLC Agricola SA and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and SLC Agricola 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 SLC Agricola SA are associated (or correlated) with Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of SLC Agricola i.e., SLC Agricola and Limoneira go up and down completely randomly.
Pair Corralation between SLC Agricola and Limoneira
Assuming the 90 days horizon SLC Agricola SA is expected to generate 1.78 times more return on investment than Limoneira. However, SLC Agricola is 1.78 times more volatile than Limoneira Co. It trades about 0.13 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.07 per unit of risk. If you would invest 285.00 in SLC Agricola SA on October 26, 2024 and sell it today you would earn a total of 24.00 from holding SLC Agricola SA or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SLC Agricola SA vs. Limoneira Co
Performance |
| Timeline |
| SLC Agricola SA |
| Limoneira |
SLC Agricola and Limoneira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SLC Agricola and Limoneira
The main advantage of trading using opposite SLC Agricola and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLC Agricola position performs unexpectedly, Limoneira 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 Limoneira will offset losses from the drop in Limoneira's long position.| SLC Agricola vs. Golden Agri Resources | SLC Agricola vs. Wilmar International | SLC Agricola vs. Brasilagro Adr | SLC Agricola vs. Alico Inc |
| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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