Correlation Between Vital Farms and Stryve Foods

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

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

Diversification Opportunities for Vital Farms and Stryve Foods

-0.12

Correlation Coefficient

Vital Farms  Stryve Foods

Good diversification

The 3 months correlation between Vital and Stryve is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Vital Farms and Stryve Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryve Foods and Vital Farms 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 Vital Farms are associated (or correlated) with Stryve Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryve Foods has no effect on the direction of Vital Farms i.e., Vital Farms and Stryve Foods go up and down completely randomly.

Pair Corralation between Vital Farms and Stryve Foods

Given the investment horizon of 90 days Vital Farms is expected to generate 0.54 times more return on investment than Stryve Foods. However, Vital Farms is 1.84 times less risky than Stryve Foods. It trades about 0.0 of its potential returns per unit of risk. Stryve Foods is currently generating about -0.1 per unit of risk. If you would invest  3,971  in Vital Farms on October 9, 2024 and sell it today you would lose (116.00) from holding Vital Farms or give up 2.92% of portfolio value over 90 days.

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

Vital Farms  vs.  Stryve Foods

Vital Farms

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vital Farms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Vital Farms is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Stryve Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stryve Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Vital Farms and Stryve Foods

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

The idea behind Vital Farms and Stryve Foods 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.