Correlation Between Shineco and Alico

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

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

Diversification Opportunities for Shineco and Alico

-0.79

Correlation Coefficient

Shineco  Alico

Pay attention - limited upside

The 3 months correlation between Shineco and Alico is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Shineco and Alico Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alico Inc and Shineco 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 Shineco are associated (or correlated) with Alico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alico Inc has no effect on the direction of Shineco i.e., Shineco and Alico go up and down completely randomly.

Pair Corralation between Shineco and Alico

Given the investment horizon of 90 days Shineco is expected to generate 3.8 times more return on investment than Alico. However, Shineco is 3.8 times more volatile than Alico Inc. It trades about 0.3 of its potential returns per unit of risk. Alico Inc is currently generating about -0.07 per unit of risk. If you would invest  65.00  in Shineco on March 31, 2024 and sell it today you would earn a total of  195.00  from holding Shineco or generate 300.0% return on investment over 90 days.

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

Shineco  vs.  Alico Inc

Shineco

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Shineco are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Shineco demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Alico Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alico Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Shineco and Alico

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

The idea behind Shineco and Alico Inc 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.