Correlation Between Real Good and Limoneira

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

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

Diversification Opportunities for Real Good and Limoneira

-0.07

Correlation Coefficient

Real Good  Limoneira

Good diversification

The 3 months correlation between Real and Limoneira is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Real Good 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 Real Good Food 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 Real Good i.e., Real Good and Limoneira go up and down completely randomly.

Pair Corralation between Real Good and Limoneira

Considering the 90-day investment horizon Real Good Food is expected to generate 2.75 times more return on investment than Limoneira. However, Real Good is 2.75 times more volatile than Limoneira Co. It trades about 0.0 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.04 per unit of risk. If you would invest  34.00  in Real Good Food on October 6, 2024 and sell it today you would lose (4.00) from holding Real Good Food or give up 11.76% of portfolio value over 90 days.

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

Real Good Food  vs.  Limoneira Co

Real Good Food

Risk-Adjusted Performance

0 of 100

Very Weak

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

Limoneira

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Real Good and Limoneira

The main advantage of trading using opposite Real Good and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good 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 Real Good Food 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.