Correlation Between Vital Farms and 26442CAA2

Can any of the company-specific risk be diversified away by investing in both Vital Farms and 26442CAA2 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 26442CAA2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vital Farms and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on Vital Farms and 26442CAA2 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 26442CAA2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vital Farms and 26442CAA2.

Diversification Opportunities for Vital Farms and 26442CAA2

-0.51

Correlation Coefficient

Vital Farms  26442CAA2

Excellent diversification

The 3 months correlation between Vital and 26442CAA2 is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Vital Farms and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAA2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of Vital Farms i.e., Vital Farms and 26442CAA2 go up and down completely randomly.

Pair Corralation between Vital Farms and 26442CAA2

Given the investment horizon of 90 days Vital Farms is expected to under-perform the 26442CAA2. In addition to that, Vital Farms is 4.1 times more volatile than DUKE ENERGY CAROLINAS. It trades about -0.08 of its total potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about 0.14 per unit of volatility. If you would invest  10,460  in DUKE ENERGY CAROLINAS on December 24, 2024 and sell it today you would earn a total of  743.00  from holding DUKE ENERGY CAROLINAS or generate 7.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.08%
Values	Daily Returns

Vital Farms  vs.  DUKE ENERGY CAROLINAS

Vital Farms

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vital Farms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 26442CAA2 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Vital Farms and 26442CAA2

The main advantage of trading using opposite Vital Farms and 26442CAA2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vital Farms position performs unexpectedly, 26442CAA2 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 26442CAA2 will offset losses from the drop in 26442CAA2's long position.

The idea behind Vital Farms and DUKE ENERGY CAROLINAS 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.