Correlation Between Chaoda Modern and Limoneira

Can any of the company-specific risk be diversified away by investing in both Chaoda Modern and Limoneira 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 Chaoda Modern and Limoneira into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chaoda Modern Agriculture and Limoneira Co, you can compare the effects of market volatilities on Chaoda Modern and Limoneira 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 Chaoda Modern with a short position of Limoneira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chaoda Modern and Limoneira.

Diversification Opportunities for Chaoda Modern and Limoneira

0.0

Correlation Coefficient

Chaoda Modern  Limoneira

Pay attention - limited upside

The 3 months correlation between Chaoda and Limoneira is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chaoda Modern Agriculture and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Chaoda Modern 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 Chaoda Modern Agriculture are associated (or correlated) with Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of Chaoda Modern i.e., Chaoda Modern and Limoneira go up and down completely randomly.

Pair Corralation between Chaoda Modern and Limoneira

If you would invest  1,934  in Limoneira Co on February 4, 2024 and sell it today you would earn a total of  265.00  from holding Limoneira Co or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Chaoda Modern Agriculture  vs.  Limoneira Co

Chaoda Modern Agriculture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chaoda Modern Agriculture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, Chaoda Modern is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Limoneira

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Limoneira Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Limoneira reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chaoda Modern and Limoneira

The main advantage of trading using opposite Chaoda Modern and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chaoda Modern position performs unexpectedly, Limoneira 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 Limoneira will offset losses from the drop in Limoneira's long position.

The idea behind Chaoda Modern Agriculture and Limoneira Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.