Correlation Between Arcadia Biosciences and Whole Earth

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

By analyzing existing cross correlation between Arcadia Biosciences and Whole Earth Brands, you can compare the effects of market volatilities on Arcadia Biosciences and Whole Earth 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 Arcadia Biosciences with a short position of Whole Earth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadia Biosciences and Whole Earth.

Diversification Opportunities for Arcadia Biosciences and Whole Earth

0.0

Correlation Coefficient

Arcadia Biosciences  Whole Earth

Pay attention - limited upside

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

Pair Corralation between Arcadia Biosciences and Whole Earth

If you would invest (100.00) in Whole Earth Brands on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Whole Earth Brands or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Arcadia Biosciences  vs.  Whole Earth Brands

Arcadia Biosciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arcadia Biosciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Whole Earth Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Whole Earth Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Whole Earth is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Arcadia Biosciences and Whole Earth

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

The idea behind Arcadia Biosciences and Whole Earth Brands 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.