Correlation Between Adecoagro and Limoneira

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

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

Diversification Opportunities for Adecoagro and Limoneira

0.83

Correlation Coefficient

Adecoagro  Limoneira

Very poor diversification

The 3 months correlation between Adecoagro and Limoneira is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Adecoagro SA and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Adecoagro 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 Adecoagro SA are associated (or correlated) with Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of Adecoagro i.e., Adecoagro and Limoneira go up and down completely randomly.

Pair Corralation between Adecoagro and Limoneira

Given the investment horizon of 90 days Adecoagro is expected to generate 1.44 times less return on investment than Limoneira. In addition to that, Adecoagro is 1.0 times more volatile than Limoneira Co. It trades about 0.03 of its total potential returns per unit of risk. Limoneira Co is currently generating about 0.05 per unit of volatility. If you would invest  1,524  in Limoneira Co on November 19, 2024 and sell it today you would earn a total of  783.00  from holding Limoneira Co or generate 51.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Adecoagro SA  vs.  Limoneira Co

Adecoagro SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adecoagro SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Limoneira

Risk-Adjusted Performance

Very Weak

Over the last 90 days Limoneira Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Adecoagro and Limoneira

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

The idea behind Adecoagro SA and Limoneira Co 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 Stocks Directory module to find actively traded stocks across global markets.