Correlation Between Analog Devices and Fresh Del

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

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

Diversification Opportunities for Analog Devices and Fresh Del

-0.07

Correlation Coefficient

Analog Devices  Fresh Del

Good diversification

The 3 months correlation between Analog and Fresh is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices and Fresh Del Monte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Del Monte and Analog Devices 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 Analog Devices are associated (or correlated) with Fresh Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Del Monte has no effect on the direction of Analog Devices i.e., Analog Devices and Fresh Del go up and down completely randomly.

Pair Corralation between Analog Devices and Fresh Del

Considering the 90-day investment horizon Analog Devices is expected to generate 1.12 times less return on investment than Fresh Del. But when comparing it to its historical volatility, Analog Devices is 1.06 times less risky than Fresh Del. It trades about 0.16 of its potential returns per unit of risk. Fresh Del Monte is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,309  in Fresh Del Monte on May 2, 2025 and sell it today you would earn a total of  634.00  from holding Fresh Del Monte or generate 19.16% return on investment over 90 days.

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

Analog Devices  vs.  Fresh Del Monte

Analog Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent fundamental indicators, Analog Devices demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Fresh Del Monte

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Del Monte are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Fresh Del reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Analog Devices and Fresh Del

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

The idea behind Analog Devices and Fresh Del Monte 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.