Correlation Between Baker Steel and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Baker Steel 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 Baker Steel and Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Steel Resources and Sligro Food Group, you can compare the effects of market volatilities on Baker Steel 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 Baker Steel with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Steel and Sligro Food.
Diversification Opportunities for Baker Steel and Sligro Food
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Baker and Sligro is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Baker Steel Resources 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 Baker Steel 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 Baker Steel Resources 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 Baker Steel i.e., Baker Steel and Sligro Food go up and down completely randomly.
Pair Corralation between Baker Steel and Sligro Food
Assuming the 90 days trading horizon Baker Steel Resources is expected to generate 2.92 times more return on investment than Sligro Food. However, Baker Steel is 2.92 times more volatile than Sligro Food Group. It trades about 0.02 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.06 per unit of risk. If you would invest 5,400 in Baker Steel Resources on October 20, 2024 and sell it today you would earn a total of 400.00 from holding Baker Steel Resources or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baker Steel Resources vs. Sligro Food Group
Performance |
| Timeline |
| Baker Steel Resources |
| Sligro Food Group |
Baker Steel and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baker Steel and Sligro Food
The main advantage of trading using opposite Baker Steel and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Steel 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.| Baker Steel vs. EJF Investments | Baker Steel vs. Samsung Electronics Co | Baker Steel vs. Porvair plc | Baker Steel vs. Chrysalis Investments |
| Sligro Food vs. Inspiration Healthcare Group | Sligro Food vs. Omega Healthcare Investors | Sligro Food vs. Ashtead Technology Holdings | Sligro Food vs. SMA Solar Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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