Correlation Between Dole PLC and Mamas Creations

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

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

Diversification Opportunities for Dole PLC and Mamas Creations

-0.61

Correlation Coefficient

Dole PLC  Mamas Creations

Excellent diversification

The 3 months correlation between Dole and Mamas is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dole PLC and Mamas Creations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mamas Creations and Dole PLC 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 Dole PLC are associated (or correlated) with Mamas Creations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mamas Creations has no effect on the direction of Dole PLC i.e., Dole PLC and Mamas Creations go up and down completely randomly.

Pair Corralation between Dole PLC and Mamas Creations

Given the investment horizon of 90 days Dole PLC is expected to generate 0.44 times more return on investment than Mamas Creations. However, Dole PLC is 2.29 times less risky than Mamas Creations. It trades about 0.03 of its potential returns per unit of risk. Mamas Creations is currently generating about -0.07 per unit of risk. If you would invest  1,347  in Dole PLC on December 27, 2024 and sell it today you would earn a total of  34.00  from holding Dole PLC or generate 2.52% return on investment over 90 days.

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

Dole PLC  vs.  Mamas Creations

Dole PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dole PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Dole PLC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Mamas Creations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mamas Creations has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dole PLC and Mamas Creations

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

The idea behind Dole PLC and Mamas Creations 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.