Correlation Between Alico and Fresh Del

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

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

Diversification Opportunities for Alico and Fresh Del

-0.4

Correlation Coefficient

Alico  Fresh Del

Very good diversification

The 3 months correlation between Alico and Fresh is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Alico Inc and Fresh Del Monte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Del Monte 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 Fresh Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Del Monte has no effect on the direction of Alico i.e., Alico and Fresh Del go up and down completely randomly.

Pair Corralation between Alico and Fresh Del

Given the investment horizon of 90 days Alico Inc is expected to under-perform the Fresh Del. In addition to that, Alico is 1.3 times more volatile than Fresh Del Monte. It trades about -0.03 of its total potential returns per unit of risk. Fresh Del Monte is currently generating about 0.13 per unit of volatility. If you would invest  2,943  in Fresh Del Monte on September 1, 2024 and sell it today you would earn a total of  432.00  from holding Fresh Del Monte or generate 14.68% return on investment over 90 days.

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

Alico Inc  vs.  Fresh Del Monte

Alico Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alico Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Alico is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Fresh Del Monte

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Del Monte are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Fresh Del reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alico and Fresh Del

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

The idea behind Alico Inc and Fresh Del Monte 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.