Correlation Between Shineco and Limoneira

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

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

Diversification Opportunities for Shineco and Limoneira

-0.54

Correlation Coefficient

Shineco  Limoneira

Excellent diversification

The 3 months correlation between Shineco and Limoneira is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shineco and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira 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 Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of Shineco i.e., Shineco and Limoneira go up and down completely randomly.

Pair Corralation between Shineco and Limoneira

Given the investment horizon of 90 days Shineco is expected to under-perform the Limoneira. In addition to that, Shineco is 5.63 times more volatile than Limoneira Co. It trades about -0.29 of its total potential returns per unit of risk. Limoneira Co is currently generating about 0.13 per unit of volatility. If you would invest  2,487  in Limoneira Co on June 30, 2024 and sell it today you would earn a total of  133.00  from holding Limoneira Co or generate 5.35% return on investment over 90 days.

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

Shineco  vs.  Limoneira Co

Shineco

Risk-Adjusted Performance

0 of 100

Very Weak

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

Limoneira

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Limoneira Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Limoneira reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shineco and Limoneira

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

The idea behind Shineco and Limoneira Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.