Correlation Between Laird Superfood and Avi

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

By analyzing existing cross correlation between Laird Superfood and Avi Ltd ADR, you can compare the effects of market volatilities on Laird Superfood and Avi 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 Laird Superfood with a short position of Avi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laird Superfood and Avi.

Diversification Opportunities for Laird Superfood and Avi

-0.03

Correlation Coefficient

Laird Superfood  Avi

Good diversification

The 3 months correlation between Laird and Avi is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Laird Superfood and Avi Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avi Ltd ADR and Laird Superfood 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 Laird Superfood are associated (or correlated) with Avi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avi Ltd ADR has no effect on the direction of Laird Superfood i.e., Laird Superfood and Avi go up and down completely randomly.

Pair Corralation between Laird Superfood and Avi

If you would invest  2,810  in Avi Ltd ADR on October 23, 2024 and sell it today you would earn a total of  0.00  from holding Avi Ltd ADR or generate 0.0% return on investment over 90 days.

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

Laird Superfood  vs.  Avi Ltd ADR

Laird Superfood

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Laird Superfood are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Laird Superfood reported solid returns over the last few months and may actually be approaching a breakup point.

Avi Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avi Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Laird Superfood and Avi

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

The idea behind Laird Superfood and Avi Ltd ADR 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.