Correlation Between Barfresh Food and Zevia Pbc

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

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

Diversification Opportunities for Barfresh Food and Zevia Pbc

-0.41

Correlation Coefficient

Barfresh Food  Zevia Pbc

Very good diversification

The 3 months correlation between Barfresh and Zevia is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Barfresh Food Group and Zevia Pbc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zevia Pbc and Barfresh Food 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 Barfresh Food Group are associated (or correlated) with Zevia Pbc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zevia Pbc has no effect on the direction of Barfresh Food i.e., Barfresh Food and Zevia Pbc go up and down completely randomly.

Pair Corralation between Barfresh Food and Zevia Pbc

Given the investment horizon of 90 days Barfresh Food Group is expected to generate 1.91 times more return on investment than Zevia Pbc. However, Barfresh Food is 1.91 times more volatile than Zevia Pbc. It trades about 0.09 of its potential returns per unit of risk. Zevia Pbc is currently generating about -0.1 per unit of risk. If you would invest  122.00  in Barfresh Food Group on March 1, 2024 and sell it today you would earn a total of  41.00  from holding Barfresh Food Group or generate 33.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Barfresh Food Group  vs.  Zevia Pbc

Barfresh Food Group

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Barfresh Food Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, Barfresh Food demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Zevia Pbc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zevia Pbc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Barfresh Food and Zevia Pbc

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

The idea behind Barfresh Food Group and Zevia Pbc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..