Correlation Between Natures Miracle and Bunge

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

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

Diversification Opportunities for Natures Miracle and Bunge

-0.84

Correlation Coefficient

Natures Miracle  Bunge

Pay attention - limited upside

The 3 months correlation between Natures and Bunge is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Natures Miracle Holding and Bunge Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunge Limited and Natures Miracle 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 Natures Miracle Holding are associated (or correlated) with Bunge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunge Limited has no effect on the direction of Natures Miracle i.e., Natures Miracle and Bunge go up and down completely randomly.

Pair Corralation between Natures Miracle and Bunge

Given the investment horizon of 90 days Natures Miracle Holding is expected to under-perform the Bunge. In addition to that, Natures Miracle is 4.74 times more volatile than Bunge Limited. It trades about -0.12 of its total potential returns per unit of risk. Bunge Limited is currently generating about 0.05 per unit of volatility. If you would invest  8,937  in Bunge Limited on February 28, 2024 and sell it today you would earn a total of  1,560  from holding Bunge Limited or generate 17.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Natures Miracle Holding  vs.  Bunge Limited

Natures Miracle Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natures Miracle Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in June 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Bunge Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bunge Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Bunge may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Natures Miracle and Bunge

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

The idea behind Natures Miracle Holding and Bunge Limited 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.