Correlation Between Sligro Food and Primary Health
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Primary Health 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 Primary Health 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 Primary Health Properties, you can compare the effects of market volatilities on Sligro Food and Primary Health 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Primary Health.
Diversification Opportunities for Sligro Food and Primary Health
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sligro and Primary is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Sligro Food i.e., Sligro Food and Primary Health go up and down completely randomly.
Pair Corralation between Sligro Food and Primary Health
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Primary Health. In addition to that, Sligro Food is 1.14 times more volatile than Primary Health Properties. It trades about -0.25 of its total potential returns per unit of risk. Primary Health Properties is currently generating about -0.1 per unit of volatility. If you would invest 9,750 in Primary Health Properties on September 13, 2024 and sell it today you would lose (450.00) from holding Primary Health Properties or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Primary Health Properties
Performance |
| Timeline |
| Sligro Food Group |
| Primary Health Properties |
Sligro Food and Primary Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Primary Health
The main advantage of trading using opposite Sligro Food and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.| Sligro Food vs. Samsung Electronics Co | Sligro Food vs. Samsung Electronics Co | Sligro Food vs. Hyundai Motor | Sligro Food vs. Reliance Industries Ltd |
| Primary Health vs. Vitec Software Group | Primary Health vs. Sabien Technology Group | Primary Health vs. McEwen Mining | Primary Health vs. Endeavour Mining Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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