Correlation Between Sligro Food and Edita Food
Can any of the company-specific risk be diversified away by investing in both Sligro Food 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 Sligro Food and Edita Food 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 Edita Food Industries, you can compare the effects of market volatilities on Sligro Food 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 Sligro Food with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Edita Food.
Diversification Opportunities for Sligro Food and Edita Food
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sligro and Edita is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group 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 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 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 Sligro Food i.e., Sligro Food and Edita Food go up and down completely randomly.
Pair Corralation between Sligro Food and Edita Food
Assuming the 90 days trading horizon Sligro Food Group is expected to generate 0.5 times more return on investment than Edita Food. However, Sligro Food Group is 1.99 times less risky than Edita Food. It trades about -0.1 of its potential returns per unit of risk. Edita Food Industries is currently generating about -0.07 per unit of risk. If you would invest 1,273 in Sligro Food Group on November 28, 2024 and sell it today you would lose (190.00) from holding Sligro Food Group or give up 14.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.8% |
| Values | Daily Returns |
Sligro Food Group vs. Edita Food Industries
Performance |
| Timeline |
| Sligro Food Group |
| Edita Food Industries |
Sligro Food and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Edita Food
The main advantage of trading using opposite Sligro Food and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food 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.| Sligro Food vs. Worldwide Healthcare Trust | Sligro Food vs. Taiwan Semiconductor Manufacturing | Sligro Food vs. Omega Healthcare Investors | Sligro Food vs. MyHealthChecked Plc |
| Edita Food vs. Omega Healthcare Investors | Edita Food vs. CVS Health Corp | Edita Food vs. Bellevue Healthcare Trust | Edita Food vs. Aeorema Communications Plc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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