Correlation Between Limoneira and Boswell J

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

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

Diversification Opportunities for Limoneira and Boswell J

0.25

Correlation Coefficient

Limoneira  Boswell J

Modest diversification

The 3 months correlation between Limoneira and Boswell is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Limoneira Co and Boswell J G in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boswell J G and Limoneira 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 Limoneira Co are associated (or correlated) with Boswell J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boswell J G has no effect on the direction of Limoneira i.e., Limoneira and Boswell J go up and down completely randomly.

Pair Corralation between Limoneira and Boswell J

Given the investment horizon of 90 days Limoneira Co is expected to generate 1.37 times more return on investment than Boswell J. However, Limoneira is 1.37 times more volatile than Boswell J G. It trades about 0.04 of its potential returns per unit of risk. Boswell J G is currently generating about 0.04 per unit of risk. If you would invest  2,589  in Limoneira Co on September 13, 2024 and sell it today you would earn a total of  95.00  from holding Limoneira Co or generate 3.67% return on investment over 90 days.

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

Limoneira Co  vs.  Boswell J G

Limoneira

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Limoneira Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Limoneira is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Boswell J G

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Boswell J G are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical and fundamental indicators, Boswell J is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Limoneira and Boswell J

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

The idea behind Limoneira Co and Boswell J G 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.