Correlation Between Tattooed Chef and Farmmi
Can any of the company-specific risk be diversified away by investing in both Tattooed Chef 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 Tattooed Chef and Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tattooed Chef and Farmmi Inc, you can compare the effects of market volatilities on Tattooed Chef 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 Tattooed Chef with a short position of Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tattooed Chef and Farmmi.
Diversification Opportunities for Tattooed Chef and Farmmi
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tattooed and Farmmi is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tattooed Chef and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc and Tattooed Chef 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 Tattooed Chef 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 Tattooed Chef i.e., Tattooed Chef and Farmmi go up and down completely randomly.
Pair Corralation between Tattooed Chef and Farmmi
If you would invest 29.00 in Farmmi Inc on September 4, 2024 and sell it today you would earn a total of 1.00 from holding Farmmi Inc or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Tattooed Chef vs. Farmmi Inc
Performance |
| Timeline |
| Tattooed Chef |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Farmmi Inc |
Tattooed Chef and Farmmi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tattooed Chef and Farmmi
The main advantage of trading using opposite Tattooed Chef and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tattooed Chef 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.| Tattooed Chef vs. Kraft Heinz Co | Tattooed Chef vs. Hormel Foods | Tattooed Chef vs. Kellanova | Tattooed Chef vs. Blue Star 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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