Correlation Between Boswell J and Limoneira

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

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

Diversification Opportunities for Boswell J and Limoneira

0.65

Correlation Coefficient

Boswell J  Limoneira

Poor diversification

The 3 months correlation between Boswell and Limoneira is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Boswell J G and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Boswell J 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 Boswell J G 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 Boswell J i.e., Boswell J and Limoneira go up and down completely randomly.

Pair Corralation between Boswell J and Limoneira

Given the investment horizon of 90 days Boswell J G is expected to generate 0.48 times more return on investment than Limoneira. However, Boswell J G is 2.08 times less risky than Limoneira. It trades about -0.07 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.19 per unit of risk. If you would invest  53,886  in Boswell J G on December 29, 2024 and sell it today you would lose (2,586) from holding Boswell J G or give up 4.8% of portfolio value over 90 days.

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

Boswell J G  vs.  Limoneira Co

Boswell J G

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boswell J G has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Boswell J is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional 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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Boswell J and Limoneira

The main advantage of trading using opposite Boswell J and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boswell J 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 Boswell J G 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 Global Correlations module to find global opportunities by holding instruments from different markets.