Correlation Between Fresh Grapes and Arena Fortify

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

By analyzing existing cross correlation between Fresh Grapes LLC and Arena Fortify Acquisition, you can compare the effects of market volatilities on Fresh Grapes and Arena Fortify 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 Grapes with a short position of Arena Fortify. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Grapes and Arena Fortify.

Diversification Opportunities for Fresh Grapes and Arena Fortify

-0.76

Correlation Coefficient

Fresh Grapes  Arena Fortify

Pay attention - limited upside

The 3 months correlation between Fresh and Arena is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Grapes LLC and Arena Fortify Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arena Fortify Acquisition and Fresh Grapes 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 Grapes LLC are associated (or correlated) with Arena Fortify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arena Fortify Acquisition has no effect on the direction of Fresh Grapes i.e., Fresh Grapes and Arena Fortify go up and down completely randomly.

Pair Corralation between Fresh Grapes and Arena Fortify

If you would invest  1,027  in Arena Fortify Acquisition on February 2, 2024 and sell it today you would earn a total of  0.00  from holding Arena Fortify Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Fresh Grapes LLC  vs.  Arena Fortify Acquisition

Fresh Grapes LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fresh Grapes LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic 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.

Arena Fortify Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arena Fortify Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Arena Fortify is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fresh Grapes and Arena Fortify

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

The idea behind Fresh Grapes LLC and Arena Fortify Acquisition 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.