Correlation Between Sow Good and Above Food

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

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

Diversification Opportunities for Sow Good and Above Food

-0.47

Correlation Coefficient

Sow Good  Above Food

Very good diversification

The 3 months correlation between Sow and Above is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sow Good Common and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Sow 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 Sow Good Common are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Sow Good i.e., Sow Good and Above Food go up and down completely randomly.

Pair Corralation between Sow Good and Above Food

Given the investment horizon of 90 days Sow Good Common is expected to under-perform the Above Food. But the otc stock apears to be less risky and, when comparing its historical volatility, Sow Good Common is 3.11 times less risky than Above Food. The otc stock trades about -0.03 of its potential returns per unit of risk. The Above Food Ingredients is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5.50  in Above Food Ingredients on October 3, 2024 and sell it today you would lose (3.20) from holding Above Food Ingredients or give up 58.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	48.31%
Values	Daily Returns

Sow Good Common  vs.  Above Food Ingredients

Sow Good Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sow Good Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Above Food Ingredients

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Above Food Ingredients are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Above Food showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sow Good and Above Food

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

The idea behind Sow Good Common and Above Food Ingredients 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.