Correlation Between Standard Foods and United Radiant
Can any of the company-specific risk be diversified away by investing in both Standard Foods and United Radiant 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 United Radiant 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 United Radiant Technology, you can compare the effects of market volatilities on Standard Foods and United Radiant 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 United Radiant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Foods and United Radiant.
Diversification Opportunities for Standard Foods and United Radiant
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Standard and United is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Standard Foods Corp and United Radiant Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Radiant Technology 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 United Radiant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Radiant Technology has no effect on the direction of Standard Foods i.e., Standard Foods and United Radiant go up and down completely randomly.
Pair Corralation between Standard Foods and United Radiant
Assuming the 90 days trading horizon Standard Foods Corp is expected to under-perform the United Radiant. But the stock apears to be less risky and, when comparing its historical volatility, Standard Foods Corp is 1.65 times less risky than United Radiant. The stock trades about -0.01 of its potential returns per unit of risk. The United Radiant Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,693 in United Radiant Technology on September 3, 2024 and sell it today you would earn a total of 597.00 from holding United Radiant Technology or generate 35.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Foods Corp vs. United Radiant Technology
Performance |
| Timeline |
| Standard Foods Corp |
| United Radiant Technology |
Standard Foods and United Radiant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Foods and United Radiant
The main advantage of trading using opposite Standard Foods and United Radiant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Foods position performs unexpectedly, United Radiant 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 United Radiant will offset losses from the drop in United Radiant's long position.| Standard Foods vs. TTET Union Corp | Standard Foods vs. Uni President Enterprises Corp | 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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