Correlation Between Collins Foods and SAMS INTERNAT
Can any of the company-specific risk be diversified away by investing in both Collins Foods and SAMS INTERNAT 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 Collins Foods and SAMS INTERNAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods Limited and SAMS INTERNAT R, you can compare the effects of market volatilities on Collins Foods and SAMS INTERNAT 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 Collins Foods with a short position of SAMS INTERNAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and SAMS INTERNAT.
Diversification Opportunities for Collins Foods and SAMS INTERNAT
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Collins and SAMS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and SAMS INTERNAT R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMS INTERNAT R and Collins 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 Collins Foods Limited are associated (or correlated) with SAMS INTERNAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMS INTERNAT R has no effect on the direction of Collins Foods i.e., Collins Foods and SAMS INTERNAT go up and down completely randomly.
Pair Corralation between Collins Foods and SAMS INTERNAT
Assuming the 90 days horizon Collins Foods is expected to generate 1.95 times less return on investment than SAMS INTERNAT. But when comparing it to its historical volatility, Collins Foods Limited is 1.46 times less risky than SAMS INTERNAT. It trades about 0.03 of its potential returns per unit of risk. SAMS INTERNAT R is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 179.00 in SAMS INTERNAT R on September 3, 2024 and sell it today you would earn a total of 73.00 from holding SAMS INTERNAT R or generate 40.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods Limited vs. SAMS INTERNAT R
Performance |
| Timeline |
| Collins Foods Limited |
| SAMS INTERNAT R |
Collins Foods and SAMS INTERNAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and SAMS INTERNAT
The main advantage of trading using opposite Collins Foods and SAMS INTERNAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, SAMS INTERNAT 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 SAMS INTERNAT will offset losses from the drop in SAMS INTERNAT's long position.| Collins Foods vs. COMBA TELECOM SYST | Collins Foods vs. UNITED UTILITIES GR | Collins Foods vs. Chesapeake Utilities | Collins Foods vs. MTI WIRELESS EDGE |
| SAMS INTERNAT vs. Ameriprise Financial | SAMS INTERNAT vs. SOUTHWEST AIRLINES | SAMS INTERNAT vs. SOFI TECHNOLOGIES | SAMS INTERNAT vs. Lion Biotechnologies |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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