Correlation Between Beeks Trading and Edita Food
Can any of the company-specific risk be diversified away by investing in both Beeks Trading and Edita 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 Beeks Trading and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and Edita Food Industries, you can compare the effects of market volatilities on Beeks Trading and Edita 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 Beeks Trading with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Edita Food.
Diversification Opportunities for Beeks Trading and Edita Food
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beeks and Edita is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and Beeks Trading 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 Beeks Trading are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Beeks Trading i.e., Beeks Trading and Edita Food go up and down completely randomly.
Pair Corralation between Beeks Trading and Edita Food
Assuming the 90 days trading horizon Beeks Trading is expected to generate 1.07 times more return on investment than Edita Food. However, Beeks Trading is 1.07 times more volatile than Edita Food Industries. It trades about 0.13 of its potential returns per unit of risk. Edita Food Industries is currently generating about 0.0 per unit of risk. If you would invest 10,700 in Beeks Trading on September 14, 2024 and sell it today you would earn a total of 18,900 from holding Beeks Trading or generate 176.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Beeks Trading vs. Edita Food Industries
Performance |
| Timeline |
| Beeks Trading |
| Edita Food Industries |
Beeks Trading and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and Edita Food
The main advantage of trading using opposite Beeks Trading and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading position performs unexpectedly, Edita 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 Edita Food will offset losses from the drop in Edita Food's long position.| Beeks Trading vs. Edita Food Industries | Beeks Trading vs. BW Offshore | Beeks Trading vs. Hilton Food Group | Beeks Trading vs. Supermarket Income REIT |
| Edita Food vs. Walmart | Edita Food vs. BYD Co | Edita Food vs. Volkswagen AG Non Vtg | Edita Food vs. Compass Group PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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