Correlation Between Limoneira and Dole PLC

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

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

Diversification Opportunities for Limoneira and Dole PLC

-0.5

Correlation Coefficient

Limoneira  Dole PLC

Very good diversification

The 3 months correlation between Limoneira and Dole is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Dole PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dole PLC and Limoneira 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 Limoneira Co are associated (or correlated) with Dole PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dole PLC has no effect on the direction of Limoneira i.e., Limoneira and Dole PLC go up and down completely randomly.

Pair Corralation between Limoneira and Dole PLC

Given the investment horizon of 90 days Limoneira Co is expected to under-perform the Dole PLC. In addition to that, Limoneira is 1.46 times more volatile than Dole PLC. It trades about -0.19 of its total potential returns per unit of risk. Dole PLC is currently generating about 0.08 per unit of volatility. If you would invest  1,338  in Dole PLC on December 29, 2024 and sell it today you would earn a total of  104.00  from holding Dole PLC or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Limoneira Co  vs.  Dole PLC

Limoneira

Risk-Adjusted Performance

Very Weak

Over the last 90 days Limoneira Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Dole PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dole PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Dole PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Limoneira and Dole PLC

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

The idea behind Limoneira Co and Dole PLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.