Correlation Between Standard Foods and An Shin
Can any of the company-specific risk be diversified away by investing in both Standard Foods and An Shin 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 Standard Foods and An Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Foods Corp and An Shin Food Services, you can compare the effects of market volatilities on Standard Foods and An Shin 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 Standard Foods with a short position of An Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Foods and An Shin.
Diversification Opportunities for Standard Foods and An Shin
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Standard and 1259 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Standard Foods Corp and An Shin Food Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on An Shin Food and Standard Foods 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 Standard Foods Corp are associated (or correlated) with An Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of An Shin Food has no effect on the direction of Standard Foods i.e., Standard Foods and An Shin go up and down completely randomly.
Pair Corralation between Standard Foods and An Shin
Assuming the 90 days trading horizon Standard Foods Corp is expected to under-perform the An Shin. In addition to that, Standard Foods is 1.39 times more volatile than An Shin Food Services. It trades about -0.04 of its total potential returns per unit of risk. An Shin Food Services is currently generating about -0.04 per unit of volatility. If you would invest 7,270 in An Shin Food Services on November 28, 2024 and sell it today you would lose (820.00) from holding An Shin Food Services or give up 11.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Foods Corp vs. An Shin Food Services
Performance |
| Timeline |
| Standard Foods Corp |
| An Shin Food |
Standard Foods and An Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Foods and An Shin
The main advantage of trading using opposite Standard Foods and An Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Foods position performs unexpectedly, An Shin 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 An Shin will offset losses from the drop in An Shin's long position.| Standard Foods vs. Uni President Enterprises Corp | Standard Foods vs. TTET Union Corp | Standard Foods vs. President Chain Store | Standard Foods vs. Charoen Pokphand Enterprise |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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