Correlation Between Whole Earth and Stryve Foods

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

By analyzing existing cross correlation between Whole Earth Brands and Stryve Foods, you can compare the effects of market volatilities on Whole Earth and Stryve Foods 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 Whole Earth with a short position of Stryve Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Earth and Stryve Foods.

Diversification Opportunities for Whole Earth and Stryve Foods

-0.51

Correlation Coefficient

Whole Earth  Stryve Foods

Excellent diversification

The 3 months correlation between Whole and Stryve is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Whole Earth Brands and Stryve Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryve Foods and Whole Earth 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 Whole Earth Brands are associated (or correlated) with Stryve Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryve Foods has no effect on the direction of Whole Earth i.e., Whole Earth and Stryve Foods go up and down completely randomly.

Pair Corralation between Whole Earth and Stryve Foods

Given the investment horizon of 90 days Whole Earth Brands is expected to under-perform the Stryve Foods. In addition to that, Whole Earth is 1.53 times more volatile than Stryve Foods. It trades about -0.04 of its total potential returns per unit of risk. Stryve Foods is currently generating about -0.05 per unit of volatility. If you would invest  244.00  in Stryve Foods on September 4, 2024 and sell it today you would lose (153.00) from holding Stryve Foods or give up 62.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	66.8%
Values	Daily Returns

Whole Earth Brands  vs.  Stryve Foods

Whole Earth Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Whole Earth Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Whole Earth is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Stryve Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stryve Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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.

Pair Trading with Whole Earth and Stryve Foods

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

The idea behind Whole Earth Brands and Stryve Foods 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.