Correlation Between Laird Superfood and Steakholder Foods

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

By analyzing existing cross correlation between Laird Superfood and Steakholder Foods, you can compare the effects of market volatilities on Laird Superfood and Steakholder Foods 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 Steakholder Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laird Superfood and Steakholder Foods.

Diversification Opportunities for Laird Superfood and Steakholder Foods

-0.62

Correlation Coefficient

Laird Superfood  Steakholder Foods

Excellent diversification

The 3 months correlation between Laird and Steakholder is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Laird Superfood and Steakholder Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steakholder Foods 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 Steakholder Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steakholder Foods has no effect on the direction of Laird Superfood i.e., Laird Superfood and Steakholder Foods go up and down completely randomly.

Pair Corralation between Laird Superfood and Steakholder Foods

Considering the 90-day investment horizon Laird Superfood is expected to generate 1.29 times more return on investment than Steakholder Foods. However, Laird Superfood is 1.29 times more volatile than Steakholder Foods. It trades about 0.1 of its potential returns per unit of risk. Steakholder Foods is currently generating about -0.12 per unit of risk. If you would invest  495.00  in Laird Superfood on September 30, 2024 and sell it today you would earn a total of  330.00  from holding Laird Superfood or generate 66.67% return on investment over 90 days.

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

Laird Superfood  vs.  Steakholder Foods

Laird Superfood

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Laird Superfood are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Laird Superfood reported solid returns over the last few months and may actually be approaching a breakup point.

Steakholder Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steakholder Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Laird Superfood and Steakholder Foods

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

The idea behind Laird Superfood and Steakholder Foods 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.