Correlation Between Markel Corp and Edita Food
Can any of the company-specific risk be diversified away by investing in both Markel Corp and Edita Food 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 Markel Corp and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Markel Corp and Edita Food Industries, you can compare the effects of market volatilities on Markel Corp and Edita Food 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 Markel Corp with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markel Corp and Edita Food.
Diversification Opportunities for Markel Corp and Edita Food
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Markel and Edita is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Markel Corp and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and Markel Corp 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 Markel Corp are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Markel Corp i.e., Markel Corp and Edita Food go up and down completely randomly.
Pair Corralation between Markel Corp and Edita Food
Assuming the 90 days trading horizon Markel Corp is expected to generate 0.51 times more return on investment than Edita Food. However, Markel Corp is 1.96 times less risky than Edita Food. It trades about 0.05 of its potential returns per unit of risk. Edita Food Industries is currently generating about 0.01 per unit of risk. If you would invest 127,736 in Markel Corp on September 4, 2024 and sell it today you would earn a total of 49,379 from holding Markel Corp or generate 38.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Markel Corp vs. Edita Food Industries
Performance |
| Timeline |
| Markel Corp |
| Edita Food Industries |
Markel Corp and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markel Corp and Edita Food
The main advantage of trading using opposite Markel Corp and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markel Corp position performs unexpectedly, Edita Food 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 Edita Food will offset losses from the drop in Edita Food's long position.| Markel Corp vs. Samsung Electronics Co | Markel Corp vs. Samsung Electronics Co | Markel Corp vs. Hyundai Motor | Markel Corp vs. Toyota Motor Corp |
| Edita Food vs. Lindsell Train Investment | Edita Food vs. Coor Service Management | Edita Food vs. Litigation Capital Management | Edita Food vs. Roebuck Food Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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