Correlation Between Food Life and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both Food Life and CHEMICAL INDUSTRIES 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 Food Life and CHEMICAL INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on Food Life and CHEMICAL INDUSTRIES 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 Food Life with a short position of CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and CHEMICAL INDUSTRIES.
Diversification Opportunities for Food Life and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Food and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES and Food Life 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 Food Life Companies are associated (or correlated) with CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of Food Life i.e., Food Life and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between Food Life and CHEMICAL INDUSTRIES
If you would invest 1,770 in Food Life Companies on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Food Life Companies or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Food Life Companies vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| Food Life Companies |
| CHEMICAL INDUSTRIES |
Food Life and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and CHEMICAL INDUSTRIES
The main advantage of trading using opposite Food Life and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life position performs unexpectedly, CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES's long position.| Food Life vs. Yum China Holdings | Food Life vs. Superior Plus Corp | Food Life vs. SIVERS SEMICONDUCTORS AB | Food Life vs. Talanx AG |
| CHEMICAL INDUSTRIES vs. Food Life Companies | CHEMICAL INDUSTRIES vs. TreeHouse Foods | CHEMICAL INDUSTRIES vs. Lifeway Foods | CHEMICAL INDUSTRIES vs. Dairy Farm International |
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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