Correlation Between Fresh Grapes and Above Food
Can any of the company-specific risk be diversified away by investing in both Fresh Grapes and Above Food 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 Fresh Grapes and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Grapes LLC and Above Food Ingredients, you can compare the effects of market volatilities on Fresh Grapes and Above Food 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 Fresh Grapes with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Grapes and Above Food.
Diversification Opportunities for Fresh Grapes and Above Food
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresh and Above is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Grapes LLC and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Fresh Grapes 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 Fresh Grapes LLC are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Fresh Grapes i.e., Fresh Grapes and Above Food go up and down completely randomly.
Pair Corralation between Fresh Grapes and Above Food
Given the investment horizon of 90 days Fresh Grapes LLC is expected to under-perform the Above Food. But the stock apears to be less risky and, when comparing its historical volatility, Fresh Grapes LLC is 2.68 times less risky than Above Food. The stock trades about -0.01 of its potential returns per unit of risk. The Above Food Ingredients is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1.51 in Above Food Ingredients on August 28, 2024 and sell it today you would earn a total of 0.49 from holding Above Food Ingredients or generate 32.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Grapes LLC vs. Above Food Ingredients
Performance |
| Timeline |
| Fresh Grapes LLC |
| Above Food Ingredients |
Fresh Grapes and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Grapes and Above Food
The main advantage of trading using opposite Fresh Grapes and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Grapes position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| Fresh Grapes vs. Andrew Peller Limited | Fresh Grapes vs. Naked Wines plc | Fresh Grapes vs. Willamette Valley Vineyards | Fresh Grapes vs. The Tinley Beverage |
| Above Food vs. Borealis Foods | Above Food vs. CIMG Inc | Above Food vs. Mamas Creations | Above Food vs. Natural Alternatives International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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