Correlation Between Andrew Peller and Big Rock
Can any of the company-specific risk be diversified away by investing in both Andrew Peller and Big Rock 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 Andrew Peller and Big Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andrew Peller Limited and Big Rock Brewery, you can compare the effects of market volatilities on Andrew Peller and Big Rock 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 Andrew Peller with a short position of Big Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andrew Peller and Big Rock.
Diversification Opportunities for Andrew Peller and Big Rock
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Andrew and Big is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Andrew Peller Limited and Big Rock Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Rock Brewery and Andrew Peller 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 Andrew Peller Limited are associated (or correlated) with Big Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Rock Brewery has no effect on the direction of Andrew Peller i.e., Andrew Peller and Big Rock go up and down completely randomly.
Pair Corralation between Andrew Peller and Big Rock
Assuming the 90 days trading horizon Andrew Peller Limited is expected to generate 0.36 times more return on investment than Big Rock. However, Andrew Peller Limited is 2.78 times less risky than Big Rock. It trades about 0.34 of its potential returns per unit of risk. Big Rock Brewery is currently generating about -0.04 per unit of risk. If you would invest 442.00 in Andrew Peller Limited on December 4, 2024 and sell it today you would earn a total of 72.00 from holding Andrew Peller Limited or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andrew Peller Limited vs. Big Rock Brewery
Performance |
| Timeline |
| Andrew Peller Limited |
| Big Rock Brewery |
Andrew Peller and Big Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andrew Peller and Big Rock
The main advantage of trading using opposite Andrew Peller and Big Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andrew Peller position performs unexpectedly, Big Rock 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 Big Rock will offset losses from the drop in Big Rock's long position.| Andrew Peller vs. Corby Spirit and | Andrew Peller vs. Stella Jones | Andrew Peller vs. Transcontinental | Andrew Peller vs. CCL Industries |
| Big Rock vs. Corby Spirit and | Big Rock vs. Gamehost | Big Rock vs. Andrew Peller Limited | Big Rock vs. Buhler Industries |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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