Correlation Between Dole PLC and Planet Green

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

By analyzing existing cross correlation between Dole PLC and Planet Green Holdings, you can compare the effects of market volatilities on Dole PLC and Planet Green 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 Dole PLC with a short position of Planet Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dole PLC and Planet Green.

Diversification Opportunities for Dole PLC and Planet Green

-0.68

Correlation Coefficient

Dole PLC  Planet Green

Excellent diversification

The 3 months correlation between Dole and Planet is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dole PLC and Planet Green Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Green Holdings and Dole PLC 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 Dole PLC are associated (or correlated) with Planet Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Green Holdings has no effect on the direction of Dole PLC i.e., Dole PLC and Planet Green go up and down completely randomly.

Pair Corralation between Dole PLC and Planet Green

Given the investment horizon of 90 days Dole PLC is expected to generate 1.34 times less return on investment than Planet Green. But when comparing it to its historical volatility, Dole PLC is 4.87 times less risky than Planet Green. It trades about 0.07 of its potential returns per unit of risk. Planet Green Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  350.00  in Planet Green Holdings on September 14, 2024 and sell it today you would lose (87.86) from holding Planet Green Holdings or give up 25.1% of portfolio value over 90 days.

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

Dole PLC  vs.  Planet Green Holdings

Dole PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dole PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Planet Green Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Planet Green Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Planet Green reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dole PLC and Planet Green

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

The idea behind Dole PLC and Planet Green Holdings 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 Commodity Directory module to find actively traded commodities issued by global exchanges.