Correlation Between Creative Realities and Farmers Edge

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

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

Diversification Opportunities for Creative Realities and Farmers Edge

0.09

Correlation Coefficient

Creative Realities  Farmers Edge

Significant diversification

The 3 months correlation between Creative and Farmers is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Creative Realities and Farmers Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Edge and Creative Realities 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 Creative Realities are associated (or correlated) with Farmers Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Edge has no effect on the direction of Creative Realities i.e., Creative Realities and Farmers Edge go up and down completely randomly.

Pair Corralation between Creative Realities and Farmers Edge

If you would invest  14.00  in Farmers Edge on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Farmers Edge or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Creative Realities  vs.  Farmers Edge

Creative Realities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creative Realities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Farmers Edge

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Creative Realities and Farmers Edge

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

The idea behind Creative Realities and Farmers Edge 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.