Correlation Between Sligro Food and Tlou Energy
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Tlou Energy 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 Tlou Energy 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 Tlou Energy, you can compare the effects of market volatilities on Sligro Food and Tlou Energy 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 Tlou Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Tlou Energy.
Diversification Opportunities for Sligro Food and Tlou Energy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sligro and Tlou is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Tlou Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tlou Energy 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 Tlou Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tlou Energy has no effect on the direction of Sligro Food i.e., Sligro Food and Tlou Energy go up and down completely randomly.
Pair Corralation between Sligro Food and Tlou Energy
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Tlou Energy. But the stock apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 2.84 times less risky than Tlou Energy. The stock trades about -0.25 of its potential returns per unit of risk. The Tlou Energy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Tlou Energy on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Tlou Energy or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Tlou Energy
Performance |
| Timeline |
| Sligro Food Group |
| Tlou Energy |
Sligro Food and Tlou Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Tlou Energy
The main advantage of trading using opposite Sligro Food and Tlou Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Tlou Energy 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 Tlou Energy will offset losses from the drop in Tlou Energy's long position.| Sligro Food vs. Catalyst Media Group | Sligro Food vs. CATLIN GROUP | Sligro Food vs. Magnora ASA | Sligro Food vs. RTW Venture Fund |
| Tlou Energy vs. Check Point Software | Tlou Energy vs. Darden Restaurants | Tlou Energy vs. Blackstone Loan Financing | Tlou Energy vs. Supermarket Income REIT |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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