Correlation Between Movella Holdings and Farmers Edge

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

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

Diversification Opportunities for Movella Holdings and Farmers Edge

0.0

Correlation Coefficient

Movella Holdings  Farmers Edge

Pay attention - limited upside

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

Pair Corralation between Movella Holdings and Farmers Edge

If you would invest (100.00) in Farmers Edge on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Farmers Edge or generate -100.0% return on investment over 90 days.

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

Movella Holdings  vs.  Farmers Edge

Movella Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Movella Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Movella Holdings is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Farmers Edge

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Movella Holdings and Farmers Edge

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

The idea behind Movella Holdings and Farmers Edge 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.