Correlation Between Earth Alive and Save Foods

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

By analyzing existing cross correlation between Earth Alive Clean and Save Foods, you can compare the effects of market volatilities on Earth Alive and Save Foods 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 Earth Alive with a short position of Save Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Earth Alive and Save Foods.

Diversification Opportunities for Earth Alive and Save Foods

0.0

Correlation Coefficient

Earth Alive  Save Foods

Pay attention - limited upside

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

Pair Corralation between Earth Alive and Save Foods

If you would invest  144.00  in Save Foods on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Save Foods or generate 0.0% return on investment over 90 days.

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

Earth Alive Clean  vs.  Save Foods

Earth Alive Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Earth Alive Clean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Earth Alive is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Save Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Save Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Earth Alive and Save Foods

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

The idea behind Earth Alive Clean and Save Foods 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.