Correlation Between COFCO Joycome and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on COFCO Joycome and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and FLOW TRADERS.
Diversification Opportunities for COFCO Joycome and FLOW TRADERS
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COFCO and FLOW is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and FLOW TRADERS go up and down completely randomly.
Pair Corralation between COFCO Joycome and FLOW TRADERS
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the FLOW TRADERS. In addition to that, COFCO Joycome is 1.4 times more volatile than FLOW TRADERS LTD. It trades about -0.23 of its total potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.23 per unit of volatility. If you would invest 2,178 in FLOW TRADERS LTD on October 14, 2024 and sell it today you would earn a total of 170.00 from holding FLOW TRADERS LTD or generate 7.81% 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. FLOW TRADERS LTD
Performance |
| Timeline |
| COFCO Joycome Foods |
| FLOW TRADERS LTD |
COFCO Joycome and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and FLOW TRADERS
The main advantage of trading using opposite COFCO Joycome and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| COFCO Joycome vs. Aluminum of | COFCO Joycome vs. JD SPORTS FASH | COFCO Joycome vs. Fortescue Metals Group | COFCO Joycome vs. Perseus Mining Limited |
| FLOW TRADERS vs. COFCO Joycome Foods | FLOW TRADERS vs. Austevoll Seafood ASA | FLOW TRADERS vs. FAST RETAIL ADR | FLOW TRADERS vs. BJs Wholesale Club |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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