Correlation Between Sligro Food and Lowland Investment
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Lowland Investment 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 Lowland Investment 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 Lowland Investment Co, you can compare the effects of market volatilities on Sligro Food and Lowland Investment 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 Lowland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Lowland Investment.
Diversification Opportunities for Sligro Food and Lowland Investment
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sligro and Lowland is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Lowland Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowland Investment 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 Lowland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowland Investment has no effect on the direction of Sligro Food i.e., Sligro Food and Lowland Investment go up and down completely randomly.
Pair Corralation between Sligro Food and Lowland Investment
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Lowland Investment. In addition to that, Sligro Food is 1.35 times more volatile than Lowland Investment Co. It trades about -0.07 of its total potential returns per unit of risk. Lowland Investment Co is currently generating about 0.04 per unit of volatility. If you would invest 11,190 in Lowland Investment Co on September 12, 2024 and sell it today you would earn a total of 1,660 from holding Lowland Investment Co or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Lowland Investment Co
Performance |
| Timeline |
| Sligro Food Group |
| Lowland Investment |
Sligro Food and Lowland Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Lowland Investment
The main advantage of trading using opposite Sligro Food and Lowland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Lowland Investment 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 Lowland Investment will offset losses from the drop in Lowland Investment'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 |
| Lowland Investment vs. Systemair AB | Lowland Investment vs. Bell Food Group | Lowland Investment vs. Finnair Oyj | Lowland Investment vs. Sligro Food Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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