Correlation Between Village Farms and Alico
Can any of the company-specific risk be diversified away by investing in both Village Farms and Alico 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 Village Farms and Alico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Farms International and Alico Inc, you can compare the effects of market volatilities on Village Farms and Alico 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 Village Farms with a short position of Alico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Farms and Alico.
Diversification Opportunities for Village Farms and Alico
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Village and Alico is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Village Farms International and Alico Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alico Inc and Village Farms 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 Village Farms International are associated (or correlated) with Alico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alico Inc has no effect on the direction of Village Farms i.e., Village Farms and Alico go up and down completely randomly.
Pair Corralation between Village Farms and Alico
Considering the 90-day investment horizon Village Farms International is expected to generate 2.98 times more return on investment than Alico. However, Village Farms is 2.98 times more volatile than Alico Inc. It trades about 0.07 of its potential returns per unit of risk. Alico Inc is currently generating about -0.32 per unit of risk. If you would invest 73.00 in Village Farms International on November 18, 2024 and sell it today you would earn a total of 3.00 from holding Village Farms International or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Village Farms International vs. Alico Inc
Performance |
| Timeline |
| Village Farms Intern |
| Alico Inc |
Village Farms and Alico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Farms and Alico
The main advantage of trading using opposite Village Farms and Alico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Farms position performs unexpectedly, Alico 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 Alico will offset losses from the drop in Alico's long position.| Village Farms vs. NaturalShrimp | Village Farms vs. AgriFORCE Growing Systems | Village Farms vs. Atlantic Sapphire ASA | Village Farms 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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