Correlation Between PF Bakkafrost and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both PF Bakkafrost and Bunzl Plc 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 PF Bakkafrost and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PF Bakkafrost and Bunzl plc, you can compare the effects of market volatilities on PF Bakkafrost and Bunzl Plc 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 PF Bakkafrost with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PF Bakkafrost and Bunzl Plc.
Diversification Opportunities for PF Bakkafrost and Bunzl Plc
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 6BF and Bunzl is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PF Bakkafrost and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and PF Bakkafrost 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 PF Bakkafrost are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of PF Bakkafrost i.e., PF Bakkafrost and Bunzl Plc go up and down completely randomly.
Pair Corralation between PF Bakkafrost and Bunzl Plc
Assuming the 90 days horizon PF Bakkafrost is expected to generate 1.81 times more return on investment than Bunzl Plc. However, PF Bakkafrost is 1.81 times more volatile than Bunzl plc. It trades about 0.06 of its potential returns per unit of risk. Bunzl plc is currently generating about 0.1 per unit of risk. If you would invest 4,418 in PF Bakkafrost on September 3, 2024 and sell it today you would earn a total of 1,157 from holding PF Bakkafrost or generate 26.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PF Bakkafrost vs. Bunzl plc
Performance |
| Timeline |
| PF Bakkafrost |
| Bunzl plc |
PF Bakkafrost and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PF Bakkafrost and Bunzl Plc
The main advantage of trading using opposite PF Bakkafrost and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PF Bakkafrost position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.| PF Bakkafrost vs. Performance Food Group | PF Bakkafrost vs. Superior Plus Corp | PF Bakkafrost vs. NMI Holdings | PF Bakkafrost vs. Origin Agritech |
| Bunzl Plc vs. COMINTL BANK ADR1 | Bunzl Plc vs. Aozora Bank | Bunzl Plc vs. VIRG NATL BANKSH | Bunzl Plc vs. Zijin Mining Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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