Correlation Between Village Farms and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Village Farms and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Village Farms and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Farms and Dow Jones.
Diversification Opportunities for Village Farms and Dow Jones
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Village and Dow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Village Farms International and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Village Farms i.e., Village Farms and Dow Jones go up and down completely randomly.
Pair Corralation between Village Farms and Dow Jones
Considering the 90-day investment horizon Village Farms International is expected to under-perform the Dow Jones. In addition to that, Village Farms is 4.49 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.1 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on October 26, 2024 and sell it today you would earn a total of 217,750 from holding Dow Jones Industrial or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Village Farms International vs. Dow Jones Industrial
Performance |
| Timeline |
Village Farms and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Village Farms International
Pair trading matchups for Village Farms
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Village Farms and Dow Jones
The main advantage of trading using opposite Village Farms and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Farms position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Village Farms vs. NaturalShrimp | Village Farms vs. AgriFORCE Growing Systems | Village Farms vs. Atlantic Sapphire ASA | Village Farms vs. Fresh Del Monte |
| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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