Correlation Between Bunzl Plc and Chefs Warehouse
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc and Chefs Warehouse 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 Bunzl Plc and Chefs Warehouse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and The Chefs Warehouse, you can compare the effects of market volatilities on Bunzl Plc and Chefs Warehouse 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 Bunzl Plc with a short position of Chefs Warehouse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and Chefs Warehouse.
Diversification Opportunities for Bunzl Plc and Chefs Warehouse
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bunzl and Chefs is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc and The Chefs Warehouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chefs Warehouse and Bunzl Plc 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 Bunzl plc are associated (or correlated) with Chefs Warehouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chefs Warehouse has no effect on the direction of Bunzl Plc i.e., Bunzl Plc and Chefs Warehouse go up and down completely randomly.
Pair Corralation between Bunzl Plc and Chefs Warehouse
Assuming the 90 days horizon Bunzl Plc is expected to generate 12.47 times less return on investment than Chefs Warehouse. But when comparing it to its historical volatility, Bunzl plc is 1.36 times less risky than Chefs Warehouse. It trades about 0.04 of its potential returns per unit of risk. The Chefs Warehouse is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,926 in The Chefs Warehouse on August 31, 2024 and sell it today you would earn a total of 545.00 from holding The Chefs Warehouse or generate 13.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bunzl plc vs. The Chefs Warehouse
Performance |
| Timeline |
| Bunzl plc |
| Chefs Warehouse |
Bunzl Plc and Chefs Warehouse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl Plc and Chefs Warehouse
The main advantage of trading using opposite Bunzl Plc and Chefs Warehouse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc position performs unexpectedly, Chefs Warehouse 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 Chefs Warehouse will offset losses from the drop in Chefs Warehouse's long position.| Bunzl Plc vs. Seychelle Environmtl | Bunzl Plc vs. Energy and Water | Bunzl Plc vs. One World Universe | Bunzl Plc vs. Vow ASA |
| Chefs Warehouse vs. US Foods Holding | Chefs Warehouse vs. Sysco | Chefs Warehouse vs. SpartanNash Co | Chefs Warehouse vs. Calavo Growers |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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