Correlation Between Iconic Brands and Fresh Grapes

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

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

Diversification Opportunities for Iconic Brands and Fresh Grapes

0.0

Correlation Coefficient

Iconic Brands  Fresh Grapes

Pay attention - limited upside

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

Pair Corralation between Iconic Brands and Fresh Grapes

Given the investment horizon of 90 days Iconic Brands is expected to generate 13.59 times more return on investment than Fresh Grapes. However, Iconic Brands is 13.59 times more volatile than Fresh Grapes LLC. It trades about 0.12 of its potential returns per unit of risk. Fresh Grapes LLC is currently generating about 0.07 per unit of risk. If you would invest  0.00  in Iconic Brands on September 23, 2024 and sell it today you would earn a total of  0.01  from holding Iconic Brands or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Iconic Brands  vs.  Fresh Grapes LLC

Iconic Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iconic Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iconic Brands is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fresh Grapes LLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Grapes LLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Fresh Grapes exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iconic Brands and Fresh Grapes

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

The idea behind Iconic Brands and Fresh Grapes LLC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.