Correlation Between Sendas Distribuidora and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and Dairy Farm 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 Sendas Distribuidora and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sendas Distribuidora SA and Dairy Farm International, you can compare the effects of market volatilities on Sendas Distribuidora and Dairy Farm 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 Sendas Distribuidora with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and Dairy Farm.
Diversification Opportunities for Sendas Distribuidora and Dairy Farm
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sendas and Dairy is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and Sendas Distribuidora 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 Sendas Distribuidora SA are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and Dairy Farm go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and Dairy Farm
Given the investment horizon of 90 days Sendas Distribuidora SA is expected to under-perform the Dairy Farm. In addition to that, Sendas Distribuidora is 28.47 times more volatile than Dairy Farm International. It trades about -0.02 of its total potential returns per unit of risk. Dairy Farm International is currently generating about -0.22 per unit of volatility. If you would invest 219.00 in Dairy Farm International on August 28, 2024 and sell it today you would lose (1.00) from holding Dairy Farm International or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sendas Distribuidora SA vs. Dairy Farm International
Performance |
| Timeline |
| Sendas Distribuidora |
| Dairy Farm International |
Sendas Distribuidora and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sendas Distribuidora and Dairy Farm
The main advantage of trading using opposite Sendas Distribuidora and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
| Dairy Farm vs. Natural Grocers by | Dairy Farm vs. Grocery Outlet Holding | Dairy Farm vs. Village Super Market | Dairy Farm vs. Ingles Markets Incorporated |
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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