Correlation Between Benson Hill, and Lavoro Limited

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

By analyzing existing cross correlation between Benson Hill, Common and Lavoro Limited Class, you can compare the effects of market volatilities on Benson Hill, and Lavoro Limited 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 Benson Hill, with a short position of Lavoro Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benson Hill, and Lavoro Limited.

Diversification Opportunities for Benson Hill, and Lavoro Limited

-0.59

Correlation Coefficient

Benson Hill,  Lavoro Limited

Excellent diversification

The 3 months correlation between Benson and Lavoro is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Benson Hill, Common and Lavoro Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lavoro Limited Class and Benson Hill, 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 Benson Hill, Common are associated (or correlated) with Lavoro Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lavoro Limited Class has no effect on the direction of Benson Hill, i.e., Benson Hill, and Lavoro Limited go up and down completely randomly.

Pair Corralation between Benson Hill, and Lavoro Limited

Given the investment horizon of 90 days Benson Hill, Common is expected to under-perform the Lavoro Limited. But the stock apears to be less risky and, when comparing its historical volatility, Benson Hill, Common is 1.29 times less risky than Lavoro Limited. The stock trades about -0.18 of its potential returns per unit of risk. The Lavoro Limited Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  495.00  in Lavoro Limited Class on August 31, 2024 and sell it today you would lose (5.00) from holding Lavoro Limited Class or give up 1.01% of portfolio value over 90 days.

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

Benson Hill, Common  vs.  Lavoro Limited Class

Benson Hill, Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Benson Hill, Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Lavoro Limited Class

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lavoro Limited Class are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lavoro Limited is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Benson Hill, and Lavoro Limited

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

The idea behind Benson Hill, Common and Lavoro Limited Class 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.