Correlation Between Via Renewables and Laird Superfood

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

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

Diversification Opportunities for Via Renewables and Laird Superfood

-0.81

Correlation Coefficient

Via Renewables  Laird Superfood

Pay attention - limited upside

The 3 months correlation between Via and Laird is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Laird Superfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laird Superfood and Via Renewables 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 Via Renewables are associated (or correlated) with Laird Superfood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laird Superfood has no effect on the direction of Via Renewables i.e., Via Renewables and Laird Superfood go up and down completely randomly.

Pair Corralation between Via Renewables and Laird Superfood

Assuming the 90 days horizon Via Renewables is expected to generate 0.13 times more return on investment than Laird Superfood. However, Via Renewables is 7.43 times less risky than Laird Superfood. It trades about 0.13 of its potential returns per unit of risk. Laird Superfood is currently generating about -0.05 per unit of risk. If you would invest  2,286  in Via Renewables on December 27, 2024 and sell it today you would earn a total of  127.00  from holding Via Renewables or generate 5.56% return on investment over 90 days.

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

Via Renewables  vs.  Laird Superfood

Via Renewables

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Via Renewables is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Laird Superfood

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Via Renewables and Laird Superfood

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

The idea behind Via Renewables and Laird Superfood 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.