Correlation Between Farmers Edge and SpringBig Holdings
Can any of the company-specific risk be diversified away by investing in both Farmers Edge and SpringBig Holdings 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 SpringBig Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers Edge and SpringBig Holdings, you can compare the effects of market volatilities on Farmers Edge and SpringBig Holdings 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 SpringBig Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Edge and SpringBig Holdings.
Diversification Opportunities for Farmers Edge and SpringBig Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farmers and SpringBig is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Edge and SpringBig Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpringBig Holdings 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 SpringBig Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpringBig Holdings has no effect on the direction of Farmers Edge i.e., Farmers Edge and SpringBig Holdings go up and down completely randomly.
Pair Corralation between Farmers Edge and SpringBig Holdings
Assuming the 90 days horizon Farmers Edge is expected to generate 0.48 times more return on investment than SpringBig Holdings. However, Farmers Edge is 2.09 times less risky than SpringBig Holdings. It trades about -0.05 of its potential returns per unit of risk. SpringBig Holdings is currently generating about -0.05 per unit of risk. If you would invest 19.00 in Farmers Edge on October 5, 2024 and sell it today you would lose (5.00) from holding Farmers Edge or give up 26.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Farmers Edge vs. SpringBig Holdings
Performance |
Timeline |
Farmers Edge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SpringBig Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Farmers Edge and SpringBig Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Farmers Edge and SpringBig Holdings
The main advantage of trading using opposite Farmers Edge and SpringBig Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Edge position performs unexpectedly, SpringBig Holdings 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 SpringBig Holdings will offset losses from the drop in SpringBig Holdings' long position.Farmers Edge vs. RenoWorks Software | Farmers Edge vs. 01 Communique Laboratory | Farmers Edge vs. RESAAS Services | Farmers Edge vs. LifeSpeak |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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