Correlation Between 111 and Freshpet

Can any of the company-specific risk be diversified away by investing in both 111 and Freshpet 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 111 and Freshpet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 111 Inc and Freshpet, you can compare the effects of market volatilities on 111 and Freshpet 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 111 with a short position of Freshpet. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and Freshpet.

Diversification Opportunities for 111 and Freshpet

-0.45

Correlation Coefficient

111  Freshpet

Very good diversification

The 3 months correlation between 111 and Freshpet is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet and 111 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 111 Inc are associated (or correlated) with Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of 111 i.e., 111 and Freshpet go up and down completely randomly.

Pair Corralation between 111 and Freshpet

Allowing for the 90-day total investment horizon 111 Inc is expected to under-perform the Freshpet. In addition to that, 111 is 1.9 times more volatile than Freshpet. It trades about -0.13 of its total potential returns per unit of risk. Freshpet is currently generating about -0.23 per unit of volatility. If you would invest  11,546  in Freshpet on February 2, 2024 and sell it today you would lose (977.00) from holding Freshpet or give up 8.46% of portfolio value over 90 days.

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

111 Inc  vs.  Freshpet

111 Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 111 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward 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.

Freshpet

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Freshpet are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Freshpet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 111 and Freshpet

The main advantage of trading using opposite 111 and Freshpet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 position performs unexpectedly, Freshpet 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 Freshpet will offset losses from the drop in Freshpet's long position.

The idea behind 111 Inc and Freshpet 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.