Correlation Between Farmers Edge and EZFL Old

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

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

Diversification Opportunities for Farmers Edge and EZFL Old

0.0

Correlation Coefficient

Farmers Edge  EZFL Old

Pay attention - limited upside

The 3 months correlation between Farmers and EZFL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Edge and EZFL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZFL Old and Farmers Edge 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 Farmers Edge are associated (or correlated) with EZFL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZFL Old has no effect on the direction of Farmers Edge i.e., Farmers Edge and EZFL Old go up and down completely randomly.

Pair Corralation between Farmers Edge and EZFL Old

If you would invest  369.00  in EZFL Old on December 26, 2024 and sell it today you would lose (19.00) from holding EZFL Old or give up 5.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Farmers Edge  vs.  EZFL Old

Farmers Edge

Risk-Adjusted Performance

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.

EZFL Old

Risk-Adjusted Performance

Weak

Over the last 90 days EZFL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite conflicting technical and fundamental indicators, EZFL Old may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Farmers Edge and EZFL Old

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

The idea behind Farmers Edge and EZFL Old 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.