Correlation Between Freshpet and Smart For

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

By analyzing existing cross correlation between Freshpet and Smart for Life,, you can compare the effects of market volatilities on Freshpet and Smart For 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 Freshpet with a short position of Smart For. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freshpet and Smart For.

Diversification Opportunities for Freshpet and Smart For

0.0

Correlation Coefficient

Freshpet  Smart For

Pay attention - limited upside

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

Pair Corralation between Freshpet and Smart For

If you would invest (100.00) in Smart for Life, on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Smart for Life, or generate -100.0% return on investment over 90 days.

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

Freshpet  vs.  Smart for Life,

Freshpet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Freshpet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Smart for Life,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smart for Life, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Smart For is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Freshpet and Smart For

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

The idea behind Freshpet and Smart for Life, 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.