Correlation Between Village Farms and Fresh Del

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

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

Diversification Opportunities for Village Farms and Fresh Del

0.53

Correlation Coefficient

Village Farms  Fresh Del

Very weak diversification

The 3 months correlation between Village and Fresh is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Village Farms International and Fresh Del Monte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Del Monte and Village Farms 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 Village Farms International are associated (or correlated) with Fresh Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Del Monte has no effect on the direction of Village Farms i.e., Village Farms and Fresh Del go up and down completely randomly.

Pair Corralation between Village Farms and Fresh Del

Considering the 90-day investment horizon Village Farms International is expected to under-perform the Fresh Del. In addition to that, Village Farms is 2.6 times more volatile than Fresh Del Monte. It trades about -0.41 of its total potential returns per unit of risk. Fresh Del Monte is currently generating about -0.46 per unit of volatility. If you would invest  2,364  in Fresh Del Monte on March 22, 2024 and sell it today you would lose (214.00) from holding Fresh Del Monte or give up 9.05% of portfolio value over 90 days.

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

Village Farms International  vs.  Fresh Del Monte

Village Farms Intern

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Village Farms International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Village Farms may actually be approaching a critical reversion point that can send shares even higher in July 2024.

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 fragile performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in July 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Village Farms and Fresh Del

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

The idea behind Village Farms International and Fresh Del Monte 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.