Correlation Between COFCO Joycome and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and BRIT AMER 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 BRIT AMER 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 BRIT AMER TOBACCO, you can compare the effects of market volatilities on COFCO Joycome and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and BRIT AMER.
Diversification Opportunities for COFCO Joycome and BRIT AMER
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COFCO and BRIT is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and BRIT AMER go up and down completely randomly.
Pair Corralation between COFCO Joycome and BRIT AMER
Assuming the 90 days horizon COFCO Joycome is expected to generate 1.21 times less return on investment than BRIT AMER. In addition to that, COFCO Joycome is 2.52 times more volatile than BRIT AMER TOBACCO. It trades about 0.09 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.28 per unit of volatility. If you would invest 3,300 in BRIT AMER TOBACCO on September 13, 2024 and sell it today you would earn a total of 281.00 from holding BRIT AMER TOBACCO or generate 8.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. BRIT AMER TOBACCO
Performance |
| Timeline |
| COFCO Joycome Foods |
| BRIT AMER TOBACCO |
COFCO Joycome and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and BRIT AMER
The main advantage of trading using opposite COFCO Joycome and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER'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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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