Correlation Between Flow Traders and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Flow Traders and Tyson Foods 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 Flow Traders and Tyson Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Traders NV and Tyson Foods Cl, you can compare the effects of market volatilities on Flow Traders and Tyson Foods 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 Flow Traders with a short position of Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Traders and Tyson Foods.
Diversification Opportunities for Flow Traders and Tyson Foods
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flow and Tyson is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Flow Traders NV and Tyson Foods Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods Cl and Flow Traders 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 Flow Traders NV are associated (or correlated) with Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods Cl has no effect on the direction of Flow Traders i.e., Flow Traders and Tyson Foods go up and down completely randomly.
Pair Corralation between Flow Traders and Tyson Foods
Assuming the 90 days trading horizon Flow Traders NV is expected to generate 2.37 times more return on investment than Tyson Foods. However, Flow Traders is 2.37 times more volatile than Tyson Foods Cl. It trades about 0.14 of its potential returns per unit of risk. Tyson Foods Cl is currently generating about 0.19 per unit of risk. If you would invest 2,398 in Flow Traders NV on November 28, 2024 and sell it today you would earn a total of 198.00 from holding Flow Traders NV or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Traders NV vs. Tyson Foods Cl
Performance |
| Timeline |
| Flow Traders NV |
| Tyson Foods Cl |
Flow Traders and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Traders and Tyson Foods
The main advantage of trading using opposite Flow Traders and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Traders position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Flow Traders vs. Ecofin Global Utilities | Flow Traders vs. Fulcrum Metals PLC | Flow Traders vs. Zurich Insurance Group | Flow Traders vs. Ecclesiastical Insurance Office |
| Tyson Foods vs. Teradata Corp | Tyson Foods vs. Hollywood Bowl Group | Tyson Foods vs. Prosiebensat 1 Media | Tyson Foods vs. LBG Media 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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