Correlation Between Stryve Foods and Laird Superfood

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

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

Diversification Opportunities for Stryve Foods and Laird Superfood

-0.78

Correlation Coefficient

Stryve Foods  Laird Superfood

Pay attention - limited upside

The 3 months correlation between Stryve and Laird is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Stryve Foods and Laird Superfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laird Superfood 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 Laird Superfood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laird Superfood has no effect on the direction of Stryve Foods i.e., Stryve Foods and Laird Superfood go up and down completely randomly.

Pair Corralation between Stryve Foods and Laird Superfood

Given the investment horizon of 90 days Stryve Foods is expected to generate 0.78 times more return on investment than Laird Superfood. However, Stryve Foods is 1.27 times less risky than Laird Superfood. It trades about -0.11 of its potential returns per unit of risk. Laird Superfood is currently generating about -0.11 per unit of risk. If you would invest  86.00  in Stryve Foods on September 12, 2024 and sell it today you would lose (10.00) from holding Stryve Foods or give up 11.63% of portfolio value over 90 days.

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

Stryve Foods  vs.  Laird Superfood

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Laird Superfood

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Laird Superfood are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Laird Superfood reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stryve Foods and Laird Superfood

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

The idea behind Stryve Foods and Laird Superfood 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.