Correlation Between Sligro Food and Industrivarden
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Industrivarden 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 Sligro Food and Industrivarden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Industrivarden AB ser, you can compare the effects of market volatilities on Sligro Food and Industrivarden 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 Sligro Food with a short position of Industrivarden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Industrivarden.
Diversification Opportunities for Sligro Food and Industrivarden
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sligro and Industrivarden is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser and Sligro Food 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 Sligro Food Group are associated (or correlated) with Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Sligro Food i.e., Sligro Food and Industrivarden go up and down completely randomly.
Pair Corralation between Sligro Food and Industrivarden
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Industrivarden. But the stock apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 1.01 times less risky than Industrivarden. The stock trades about -0.26 of its potential returns per unit of risk. The Industrivarden AB ser is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 37,380 in Industrivarden AB ser on September 12, 2024 and sell it today you would lose (500.00) from holding Industrivarden AB ser or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Industrivarden AB ser
Performance |
| Timeline |
| Sligro Food Group |
| Industrivarden AB ser |
Sligro Food and Industrivarden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Industrivarden
The main advantage of trading using opposite Sligro Food and Industrivarden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Industrivarden 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 Industrivarden will offset losses from the drop in Industrivarden's long position.| Sligro Food vs. Primary Health Properties | Sligro Food vs. Deltex Medical Group | Sligro Food vs. CompuGroup Medical AG | Sligro Food vs. Abingdon Health Plc |
| Industrivarden vs. Oakley Capital Investments | Industrivarden vs. Aurora Investment Trust | Industrivarden vs. Target Healthcare REIT | Industrivarden vs. Universal Health Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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