Correlation Between Abingdon Health and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Sligro Food 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 Abingdon Health and Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Sligro Food Group, you can compare the effects of market volatilities on Abingdon Health and Sligro Food 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 Abingdon Health with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Sligro Food.
Diversification Opportunities for Abingdon Health and Sligro Food
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Abingdon and Sligro is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and Abingdon Health 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 Abingdon Health Plc are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Abingdon Health i.e., Abingdon Health and Sligro Food go up and down completely randomly.
Pair Corralation between Abingdon Health and Sligro Food
Assuming the 90 days trading horizon Abingdon Health Plc is expected to generate 3.48 times more return on investment than Sligro Food. However, Abingdon Health is 3.48 times more volatile than Sligro Food Group. It trades about -0.03 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.21 per unit of risk. If you would invest 775.00 in Abingdon Health Plc on September 13, 2024 and sell it today you would lose (25.00) from holding Abingdon Health Plc or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Sligro Food Group
Performance |
| Timeline |
| Abingdon Health Plc |
| Sligro Food Group |
Abingdon Health and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Sligro Food
The main advantage of trading using opposite Abingdon Health and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Abingdon Health vs. SBM Offshore NV | Abingdon Health vs. Hochschild Mining plc | Abingdon Health vs. Indutrade AB | Abingdon Health vs. GreenX Metals |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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