Correlation Between COFCO Joycome and Electrolux Professional
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Electrolux Professional 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 COFCO Joycome and Electrolux Professional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Electrolux Professional AB, you can compare the effects of market volatilities on COFCO Joycome and Electrolux Professional 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 COFCO Joycome with a short position of Electrolux Professional. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Electrolux Professional.
Diversification Opportunities for COFCO Joycome and Electrolux Professional
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between COFCO and Electrolux is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Electrolux Professional AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrolux Professional and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Electrolux Professional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrolux Professional has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Electrolux Professional go up and down completely randomly.
Pair Corralation between COFCO Joycome and Electrolux Professional
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Electrolux Professional. In addition to that, COFCO Joycome is 1.51 times more volatile than Electrolux Professional AB. It trades about -0.11 of its total potential returns per unit of risk. Electrolux Professional AB is currently generating about -0.06 per unit of volatility. If you would invest 623.00 in Electrolux Professional AB on September 12, 2024 and sell it today you would lose (25.00) from holding Electrolux Professional AB or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Electrolux Professional AB
Performance |
| Timeline |
| COFCO Joycome Foods |
| Electrolux Professional |
COFCO Joycome and Electrolux Professional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Electrolux Professional
The main advantage of trading using opposite COFCO Joycome and Electrolux Professional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Electrolux Professional 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 Electrolux Professional will offset losses from the drop in Electrolux Professional's long position.| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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