Correlation Between Armanino Foods and Sow Good

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

By analyzing existing cross correlation between Armanino Foods New and Sow Good Common, you can compare the effects of market volatilities on Armanino Foods and Sow Good 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 Armanino Foods with a short position of Sow Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armanino Foods and Sow Good.

Diversification Opportunities for Armanino Foods and Sow Good

-0.33

Correlation Coefficient

Armanino Foods  Sow Good

Very good diversification

The 3 months correlation between Armanino and Sow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Armanino Foods New and Sow Good Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sow Good Common and Armanino Foods 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 Armanino Foods New are associated (or correlated) with Sow Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sow Good Common has no effect on the direction of Armanino Foods i.e., Armanino Foods and Sow Good go up and down completely randomly.

Pair Corralation between Armanino Foods and Sow Good

Given the investment horizon of 90 days Armanino Foods is expected to generate 2.28 times less return on investment than Sow Good. But when comparing it to its historical volatility, Armanino Foods New is 5.14 times less risky than Sow Good. It trades about 0.1 of its potential returns per unit of risk. Sow Good Common is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Sow Good Common on October 21, 2024 and sell it today you would earn a total of  27.00  from holding Sow Good Common or generate 10.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	24.6%
Values	Daily Returns

Armanino Foods New  vs.  Sow Good Common

Armanino Foods New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armanino Foods New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Armanino Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sow Good Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sow Good Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Armanino Foods and Sow Good

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

The idea behind Armanino Foods New and Sow Good Common 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .