Correlation Between Vital Farms and Future Fintech

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

By analyzing existing cross correlation between Vital Farms and Future Fintech Group, you can compare the effects of market volatilities on Vital Farms and Future Fintech 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 Vital Farms with a short position of Future Fintech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vital Farms and Future Fintech.

Diversification Opportunities for Vital Farms and Future Fintech

0.88

Correlation Coefficient

Vital Farms  Future Fintech

Very poor diversification

The 3 months correlation between Vital and Future is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Vital Farms and Future Fintech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Fintech Group and Vital 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 Vital Farms are associated (or correlated) with Future Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Fintech Group has no effect on the direction of Vital Farms i.e., Vital Farms and Future Fintech go up and down completely randomly.

Pair Corralation between Vital Farms and Future Fintech

Given the investment horizon of 90 days Vital Farms is expected to generate 0.86 times more return on investment than Future Fintech. However, Vital Farms is 1.16 times less risky than Future Fintech. It trades about 0.07 of its potential returns per unit of risk. Future Fintech Group is currently generating about -0.19 per unit of risk. If you would invest  2,625  in Vital Farms on June 22, 2024 and sell it today you would earn a total of  627.00  from holding Vital Farms or generate 23.89% return on investment over 90 days.

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

Vital Farms  vs.  Future Fintech Group

Vital Farms

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vital Farms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in October 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Future Fintech Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Fintech Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in October 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vital Farms and Future Fintech

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

The idea behind Vital Farms and Future Fintech Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.