Correlation Between Village Farms and NaturalShrimp
Can any of the company-specific risk be diversified away by investing in both Village Farms and NaturalShrimp 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 NaturalShrimp 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 NaturalShrimp, you can compare the effects of market volatilities on Village Farms and NaturalShrimp 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 NaturalShrimp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Farms and NaturalShrimp.
Diversification Opportunities for Village Farms and NaturalShrimp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Village and NaturalShrimp is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Village Farms International and NaturalShrimp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NaturalShrimp 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 NaturalShrimp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NaturalShrimp has no effect on the direction of Village Farms i.e., Village Farms and NaturalShrimp go up and down completely randomly.
Pair Corralation between Village Farms and NaturalShrimp
Considering the 90-day investment horizon Village Farms International is expected to generate 0.16 times more return on investment than NaturalShrimp. However, Village Farms International is 6.39 times less risky than NaturalShrimp. It trades about -0.1 of its potential returns per unit of risk. NaturalShrimp is currently generating about -0.29 per unit of risk. If you would invest 81.00 in Village Farms International on October 26, 2024 and sell it today you would lose (6.00) from holding Village Farms International or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Village Farms International vs. NaturalShrimp
Performance |
| Timeline |
| Village Farms Intern |
| NaturalShrimp |
Village Farms and NaturalShrimp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Farms and NaturalShrimp
The main advantage of trading using opposite Village Farms and NaturalShrimp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Farms position performs unexpectedly, NaturalShrimp 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 NaturalShrimp will offset losses from the drop in NaturalShrimp'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 |
| NaturalShrimp vs. AgriFORCE Growing Systems | NaturalShrimp vs. Atlantic Sapphire ASA | NaturalShrimp vs. Village Farms International | NaturalShrimp vs. Australian Agricultural |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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