Correlation Between Standard Foods and Onyx Healthcare
Can any of the company-specific risk be diversified away by investing in both Standard Foods and Onyx Healthcare 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 Onyx Healthcare 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 Onyx Healthcare, you can compare the effects of market volatilities on Standard Foods and Onyx Healthcare 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 Onyx Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Foods and Onyx Healthcare.
Diversification Opportunities for Standard Foods and Onyx Healthcare
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Standard and Onyx is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Standard Foods Corp and Onyx Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onyx Healthcare 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 Onyx Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onyx Healthcare has no effect on the direction of Standard Foods i.e., Standard Foods and Onyx Healthcare go up and down completely randomly.
Pair Corralation between Standard Foods and Onyx Healthcare
Assuming the 90 days trading horizon Standard Foods is expected to generate 3.96 times less return on investment than Onyx Healthcare. But when comparing it to its historical volatility, Standard Foods Corp is 5.71 times less risky than Onyx Healthcare. It trades about 0.26 of its potential returns per unit of risk. Onyx Healthcare is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 16,400 in Onyx Healthcare on November 28, 2024 and sell it today you would earn a total of 1,350 from holding Onyx Healthcare or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Foods Corp vs. Onyx Healthcare
Performance |
| Timeline |
| Standard Foods Corp |
| Onyx Healthcare |
Standard Foods and Onyx Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Foods and Onyx Healthcare
The main advantage of trading using opposite Standard Foods and Onyx Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Foods position performs unexpectedly, Onyx Healthcare 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 Onyx Healthcare will offset losses from the drop in Onyx Healthcare'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 |
| Onyx Healthcare vs. K Way Information | Onyx Healthcare vs. Gigastorage Corp | Onyx Healthcare vs. Jetway Information Co | Onyx Healthcare vs. Trade Van Information Services |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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