Correlation Between PURE FOODS and COFACE SA
Can any of the company-specific risk be diversified away by investing in both PURE FOODS and COFACE SA 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 PURE FOODS and COFACE SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PURE FOODS TASMANIA and COFACE SA, you can compare the effects of market volatilities on PURE FOODS and COFACE SA 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 PURE FOODS with a short position of COFACE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURE FOODS and COFACE SA.
Diversification Opportunities for PURE FOODS and COFACE SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PURE and COFACE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PURE FOODS TASMANIA and COFACE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFACE SA and PURE FOODS 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 PURE FOODS TASMANIA are associated (or correlated) with COFACE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFACE SA has no effect on the direction of PURE FOODS i.e., PURE FOODS and COFACE SA go up and down completely randomly.
Pair Corralation between PURE FOODS and COFACE SA
Assuming the 90 days trading horizon PURE FOODS TASMANIA is expected to generate 31.9 times more return on investment than COFACE SA. However, PURE FOODS is 31.9 times more volatile than COFACE SA. It trades about 0.06 of its potential returns per unit of risk. COFACE SA is currently generating about 0.05 per unit of risk. If you would invest 9.20 in PURE FOODS TASMANIA on October 29, 2024 and sell it today you would lose (8.15) from holding PURE FOODS TASMANIA or give up 88.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
PURE FOODS TASMANIA vs. COFACE SA
Performance |
| Timeline |
| PURE FOODS TASMANIA |
| COFACE SA |
PURE FOODS and COFACE SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PURE FOODS and COFACE SA
The main advantage of trading using opposite PURE FOODS and COFACE SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PURE FOODS position performs unexpectedly, COFACE SA 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 COFACE SA will offset losses from the drop in COFACE SA's long position.| PURE FOODS vs. GALENA MINING LTD | PURE FOODS vs. Yanzhou Coal Mining | PURE FOODS vs. CLEAN ENERGY FUELS | PURE FOODS vs. Cleanaway Waste Management |
| COFACE SA vs. NH Foods | COFACE SA vs. PURE FOODS TASMANIA | COFACE SA vs. MOLSON RS BEVERAGE | COFACE SA vs. PATTIES FOODS |
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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