Correlation Between Pardee Resources and Limoneira

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

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

Diversification Opportunities for Pardee Resources and Limoneira

-0.29

Correlation Coefficient

Pardee Resources  Limoneira

Very good diversification

The 3 months correlation between Pardee and Limoneira is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pardee Resources Co and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Pardee Resources 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 Pardee Resources Co are associated (or correlated) with Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of Pardee Resources i.e., Pardee Resources and Limoneira go up and down completely randomly.

Pair Corralation between Pardee Resources and Limoneira

Given the investment horizon of 90 days Pardee Resources Co is expected to generate 0.56 times more return on investment than Limoneira. However, Pardee Resources Co is 1.79 times less risky than Limoneira. It trades about 0.03 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.27 per unit of risk. If you would invest  32,389  in Pardee Resources Co on December 23, 2024 and sell it today you would earn a total of  526.00  from holding Pardee Resources Co or generate 1.62% return on investment over 90 days.

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

Pardee Resources Co  vs.  Limoneira Co

Pardee Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pardee Resources Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Pardee Resources is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with Pardee Resources and Limoneira

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

The idea behind Pardee Resources Co and Limoneira Co 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.