Correlation Between Bunzl Plc and Colabor
Can any of the company-specific risk be diversified away by investing in both Bunzl Plc and Colabor 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 Colabor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bunzl plc and Colabor Group, you can compare the effects of market volatilities on Bunzl Plc and Colabor 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 Colabor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bunzl Plc and Colabor.
Diversification Opportunities for Bunzl Plc and Colabor
Very weak diversification
The 3 months correlation between Bunzl and Colabor is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bunzl plc and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group 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 Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of Bunzl Plc i.e., Bunzl Plc and Colabor go up and down completely randomly.
Pair Corralation between Bunzl Plc and Colabor
Assuming the 90 days horizon Bunzl plc is expected to generate 0.54 times more return on investment than Colabor. However, Bunzl plc is 1.85 times less risky than Colabor. It trades about 0.04 of its potential returns per unit of risk. Colabor Group is currently generating about -0.06 per unit of risk. If you would invest 1,937 in Bunzl plc on November 3, 2024 and sell it today you would earn a total of 206.00 from holding Bunzl plc or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Bunzl plc vs. Colabor Group
Performance |
| Timeline |
| Bunzl plc |
| Colabor Group |
Bunzl Plc and Colabor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bunzl Plc and Colabor
The main advantage of trading using opposite Bunzl Plc and Colabor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bunzl Plc position performs unexpectedly, Colabor 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 Colabor will offset losses from the drop in Colabor's long position.| Bunzl Plc vs. Associated British Foods | Bunzl Plc vs. Compass Group PLC | Bunzl Plc vs. Ashtead Gro | Bunzl Plc vs. Kerry Group PLC |
| Colabor vs. Mission Produce | Colabor vs. The Andersons | Colabor vs. Bunzl plc | Colabor vs. Innovative Food Hldg |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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