Correlation Between Limoneira and Farm Lands

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

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

Diversification Opportunities for Limoneira and Farm Lands

0.0

Correlation Coefficient

Limoneira  Farm Lands

Pay attention - limited upside

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

Pair Corralation between Limoneira and Farm Lands

If you would invest  2,575  in Limoneira Co on September 4, 2024 and sell it today you would earn a total of  154.00  from holding Limoneira Co or generate 5.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Limoneira Co  vs.  Farm Lands of

Limoneira

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Limoneira Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Limoneira may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Farm Lands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Farm Lands of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Farm Lands is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Limoneira and Farm Lands

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

The idea behind Limoneira Co and Farm Lands of 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..