Correlation Between Central Asia and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and Sligro Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Sligro Food Group, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Sligro Food.
Diversification Opportunities for Central Asia and Sligro Food
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Central and Sligro is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals 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 Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and Sligro Food go up and down completely randomly.
Pair Corralation between Central Asia and Sligro Food
Assuming the 90 days trading horizon Central Asia Metals is expected to generate 1.08 times more return on investment than Sligro Food. However, Central Asia is 1.08 times more volatile than Sligro Food Group. It trades about 0.14 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.09 per unit of risk. If you would invest 15,140 in Central Asia Metals on October 20, 2024 and sell it today you would earn a total of 740.00 from holding Central Asia Metals or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. Sligro Food Group
Performance |
| Timeline |
| Central Asia Metals |
| Sligro Food Group |
Central Asia and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Sligro Food
The main advantage of trading using opposite Central Asia and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. InterContinental Hotels Group | Central Asia vs. Rosslyn Data Technologies | Central Asia vs. Commerzbank AG | Central Asia vs. St Galler Kantonalbank |
| Sligro Food vs. Delta Air Lines | Sligro Food vs. Tyson Foods Cl | Sligro Food vs. Alaska Air Group | Sligro Food vs. Porvair 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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