Correlation Between Farmers Edge and Inpixon

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

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

Diversification Opportunities for Farmers Edge and Inpixon

-0.23

Correlation Coefficient

Farmers Edge  Inpixon

Very good diversification

The 3 months correlation between Farmers and Inpixon is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Edge and Inpixon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpixon and Farmers Edge 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 Farmers Edge are associated (or correlated) with Inpixon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpixon has no effect on the direction of Farmers Edge i.e., Farmers Edge and Inpixon go up and down completely randomly.

Pair Corralation between Farmers Edge and Inpixon

Assuming the 90 days horizon Farmers Edge is expected to generate 0.25 times more return on investment than Inpixon. However, Farmers Edge is 4.07 times less risky than Inpixon. It trades about -0.03 of its potential returns per unit of risk. Inpixon is currently generating about -0.07 per unit of risk. If you would invest  18.00  in Farmers Edge on September 14, 2024 and sell it today you would lose (4.00) from holding Farmers Edge or give up 22.22% of portfolio value over 90 days.

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

Farmers Edge  vs.  Inpixon

Farmers Edge

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Farmers Edge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Farmers Edge is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Inpixon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inpixon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Inpixon is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Farmers Edge and Inpixon

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

The idea behind Farmers Edge and Inpixon 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.