Correlation Between Fresh Del and Forafric Global

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

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

Diversification Opportunities for Fresh Del and Forafric Global

-0.81

Correlation Coefficient

Fresh Del  Forafric Global

Pay attention - limited upside

The 3 months correlation between Fresh and Forafric is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Forafric Global PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forafric Global PLC and Fresh Del 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 Del Monte are associated (or correlated) with Forafric Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forafric Global PLC has no effect on the direction of Fresh Del i.e., Fresh Del and Forafric Global go up and down completely randomly.

Pair Corralation between Fresh Del and Forafric Global

Considering the 90-day investment horizon Fresh Del Monte is expected to under-perform the Forafric Global. But the stock apears to be less risky and, when comparing its historical volatility, Fresh Del Monte is 1.55 times less risky than Forafric Global. The stock trades about -0.45 of its potential returns per unit of risk. The Forafric Global PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,117  in Forafric Global PLC on March 18, 2024 and sell it today you would lose (17.00) from holding Forafric Global PLC or give up 1.52% of portfolio value over 90 days.

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

Fresh Del Monte  vs.  Forafric Global PLC

Fresh Del Monte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Del Monte has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Forafric Global PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Forafric Global PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Forafric Global may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Fresh Del and Forafric Global

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

The idea behind Fresh Del Monte and Forafric Global 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.