Correlation Between Farmer Bros and Oriental Rise

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

By analyzing existing cross correlation between Farmer Bros Co and Oriental Rise Holdings, you can compare the effects of market volatilities on Farmer Bros and Oriental Rise 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 Farmer Bros with a short position of Oriental Rise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmer Bros and Oriental Rise.

Diversification Opportunities for Farmer Bros and Oriental Rise

-0.31

Correlation Coefficient

Farmer Bros  Oriental Rise

Very good diversification

The 3 months correlation between Farmer and Oriental is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Farmer Bros Co and Oriental Rise Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Rise Holdings and Farmer Bros 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 Farmer Bros Co are associated (or correlated) with Oriental Rise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Rise Holdings has no effect on the direction of Farmer Bros i.e., Farmer Bros and Oriental Rise go up and down completely randomly.

Pair Corralation between Farmer Bros and Oriental Rise

Given the investment horizon of 90 days Farmer Bros Co is expected to generate 0.34 times more return on investment than Oriental Rise. However, Farmer Bros Co is 2.93 times less risky than Oriental Rise. It trades about 0.0 of its potential returns per unit of risk. Oriental Rise Holdings is currently generating about -0.15 per unit of risk. If you would invest  180.00  in Farmer Bros Co on May 7, 2025 and sell it today you would lose (11.00) from holding Farmer Bros Co or give up 6.11% of portfolio value over 90 days.

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

Farmer Bros Co  vs.  Oriental Rise Holdings

Farmer Bros

Risk-Adjusted Performance

Weakest

Over the last 90 days Farmer Bros Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Farmer Bros is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Oriental Rise Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Oriental Rise Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Farmer Bros and Oriental Rise

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

The idea behind Farmer Bros Co and Oriental Rise Holdings 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..