Correlation Between Wilmar International and Limoneira

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

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

Diversification Opportunities for Wilmar International and Limoneira

-0.51

Correlation Coefficient

Wilmar International  Limoneira

Excellent diversification

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

Pair Corralation between Wilmar International and Limoneira

Assuming the 90 days horizon Wilmar International is expected to generate 0.62 times more return on investment than Limoneira. However, Wilmar International is 1.63 times less risky than Limoneira. It trades about 0.1 of its potential returns per unit of risk. Limoneira Co is currently generating about -0.2 per unit of risk. If you would invest  2,284  in Wilmar International on December 30, 2024 and sell it today you would earn a total of  194.00  from holding Wilmar International or generate 8.49% return on investment over 90 days.

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

Wilmar International  vs.  Limoneira Co

Wilmar International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmar International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward indicators, Wilmar International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Limoneira

Risk-Adjusted Performance

Very Weak

Over the last 90 days Limoneira Co has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Wilmar International and Limoneira

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

The idea behind Wilmar International and Limoneira Co 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 Anywhere module to track or share privately all of your investments from the convenience of any device.