Correlation Between Stryve Foods and Limoneira

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

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

Diversification Opportunities for Stryve Foods and Limoneira

-0.49

Correlation Coefficient

Stryve Foods  Limoneira

Very good diversification

The 3 months correlation between Stryve and Limoneira is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Stryve Foods and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Stryve Foods 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 Stryve Foods 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 Stryve Foods i.e., Stryve Foods and Limoneira go up and down completely randomly.

Pair Corralation between Stryve Foods and Limoneira

Given the investment horizon of 90 days Stryve Foods is expected to under-perform the Limoneira. In addition to that, Stryve Foods is 3.51 times more volatile than Limoneira Co. It trades about -0.07 of its total potential returns per unit of risk. Limoneira Co is currently generating about 0.12 per unit of volatility. If you would invest  2,411  in Limoneira Co on September 1, 2024 and sell it today you would earn a total of  369.00  from holding Limoneira Co or generate 15.3% return on investment over 90 days.

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

Stryve Foods  vs.  Limoneira Co

Stryve Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stryve Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Limoneira

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Limoneira Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Limoneira reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stryve Foods and Limoneira

The main advantage of trading using opposite Stryve Foods and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stryve Foods 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 Stryve Foods 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.