Correlation Between Alico and Dole PLC

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

By analyzing existing cross correlation between Alico Inc and Dole PLC, you can compare the effects of market volatilities on Alico and Dole PLC 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 Alico with a short position of Dole PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alico and Dole PLC.

Diversification Opportunities for Alico and Dole PLC

-0.06

Correlation Coefficient

Alico  Dole PLC

Good diversification

The 3 months correlation between Alico and Dole is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Alico Inc and Dole PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dole PLC and Alico 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 Alico Inc are associated (or correlated) with Dole PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dole PLC has no effect on the direction of Alico i.e., Alico and Dole PLC go up and down completely randomly.

Pair Corralation between Alico and Dole PLC

Given the investment horizon of 90 days Alico Inc is expected to under-perform the Dole PLC. In addition to that, Alico is 1.03 times more volatile than Dole PLC. It trades about -0.02 of its total potential returns per unit of risk. Dole PLC is currently generating about 0.03 per unit of volatility. If you would invest  1,018  in Dole PLC on January 31, 2024 and sell it today you would earn a total of  216.00  from holding Dole PLC or generate 21.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Alico Inc  vs.  Dole PLC

Alico Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alico Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Alico is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Dole PLC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dole PLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, Dole PLC may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Alico and Dole PLC

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

The idea behind Alico Inc and Dole PLC 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 Stocks Directory module to find actively traded stocks across global markets.