Correlation Between Forafric Global and Dole PLC

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

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

Diversification Opportunities for Forafric Global and Dole PLC

0.52

Correlation Coefficient

Forafric Global  Dole PLC

Very weak diversification

The 3 months correlation between Forafric and Dole is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Forafric Global PLC and Dole PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dole PLC and Forafric Global 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 Forafric Global PLC are associated (or correlated) with Dole PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dole PLC has no effect on the direction of Forafric Global i.e., Forafric Global and Dole PLC go up and down completely randomly.

Pair Corralation between Forafric Global and Dole PLC

Given the investment horizon of 90 days Forafric Global PLC is expected to under-perform the Dole PLC. But the stock apears to be less risky and, when comparing its historical volatility, Forafric Global PLC is 1.32 times less risky than Dole PLC. The stock trades about -0.1 of its potential returns per unit of risk. The Dole PLC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,603  in Dole PLC on August 30, 2024 and sell it today you would lose (100.00) from holding Dole PLC or give up 6.24% of portfolio value over 90 days.

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

Forafric Global PLC  vs.  Dole PLC

Forafric Global PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forafric Global PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Dole PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Forafric Global and Dole PLC

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

The idea behind Forafric Global PLC and Dole 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.