Correlation Between Limoneira and SLC Agricola

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

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

Diversification Opportunities for Limoneira and SLC Agricola

-0.59

Correlation Coefficient

Limoneira  SLC Agricola

Excellent diversification

The 3 months correlation between Limoneira and SLC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and SLC Agricola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLC Agricola SA 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 SLC Agricola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLC Agricola SA has no effect on the direction of Limoneira i.e., Limoneira and SLC Agricola go up and down completely randomly.

Pair Corralation between Limoneira and SLC Agricola

Given the investment horizon of 90 days Limoneira Co is expected to under-perform the SLC Agricola. In addition to that, Limoneira is 1.28 times more volatile than SLC Agricola SA. It trades about -0.19 of its total potential returns per unit of risk. SLC Agricola SA is currently generating about 0.11 per unit of volatility. If you would invest  279.00  in SLC Agricola SA on December 29, 2024 and sell it today you would earn a total of  32.00  from holding SLC Agricola SA or generate 11.47% 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.  SLC Agricola SA

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.

SLC Agricola SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SLC Agricola SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking indicators, SLC Agricola may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Limoneira and SLC Agricola

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

The idea behind Limoneira Co and SLC Agricola SA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..