Correlation Between Alico and AppHarvest

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

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

Diversification Opportunities for Alico and AppHarvest

0.0

Correlation Coefficient

Alico  AppHarvest

Pay attention - limited upside

The 3 months correlation between Alico and AppHarvest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alico Inc and AppHarvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AppHarvest and Alico 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 Alico Inc are associated (or correlated) with AppHarvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AppHarvest has no effect on the direction of Alico i.e., Alico and AppHarvest go up and down completely randomly.

Pair Corralation between Alico and AppHarvest

If you would invest  2,544  in Alico Inc on December 30, 2024 and sell it today you would earn a total of  399.00  from holding Alico Inc or generate 15.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alico Inc  vs.  AppHarvest

Alico Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alico Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Alico displayed solid returns over the last few months and may actually be approaching a breakup point.

AppHarvest

Risk-Adjusted Performance

Very Weak

Over the last 90 days AppHarvest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, AppHarvest is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Alico and AppHarvest

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

The idea behind Alico Inc and AppHarvest 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.