Correlation Between Sendas Distribuidora and Innovative Food
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and Innovative 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 Sendas Distribuidora and Innovative Food 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 Innovative Food Hldg, you can compare the effects of market volatilities on Sendas Distribuidora and Innovative 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 Sendas Distribuidora with a short position of Innovative Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and Innovative Food.
Diversification Opportunities for Sendas Distribuidora and Innovative Food
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sendas and Innovative is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and Innovative Food Hldg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Food Hldg 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 Innovative Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Food Hldg has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and Innovative Food go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and Innovative Food
Given the investment horizon of 90 days Sendas Distribuidora SA is expected to under-perform the Innovative Food. But the stock apears to be less risky and, when comparing its historical volatility, Sendas Distribuidora SA is 1.07 times less risky than Innovative Food. The stock trades about -0.06 of its potential returns per unit of risk. The Innovative Food Hldg is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 168.00 in Innovative Food Hldg on August 31, 2024 and sell it today you would lose (8.00) from holding Innovative Food Hldg or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sendas Distribuidora SA vs. Innovative Food Hldg
Performance |
| Timeline |
| Sendas Distribuidora |
| Innovative Food Hldg |
Sendas Distribuidora and Innovative Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sendas Distribuidora and Innovative Food
The main advantage of trading using opposite Sendas Distribuidora and Innovative Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora position performs unexpectedly, Innovative 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 Innovative Food will offset losses from the drop in Innovative Food'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 |
| Innovative Food vs. Organto Foods | Innovative Food vs. Colabor Group | Innovative Food vs. Bunzl plc | Innovative Food vs. Hf Foods 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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