Correlation Between ChampionX and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both ChampionX and Tyson Foods 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 ChampionX and Tyson Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Tyson Foods, you can compare the effects of market volatilities on ChampionX and Tyson Foods 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 ChampionX with a short position of Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Tyson Foods.
Diversification Opportunities for ChampionX and Tyson Foods
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChampionX and Tyson is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods and ChampionX 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 ChampionX are associated (or correlated) with Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of ChampionX i.e., ChampionX and Tyson Foods go up and down completely randomly.
Pair Corralation between ChampionX and Tyson Foods
Considering the 90-day investment horizon ChampionX is expected to generate 2.3 times less return on investment than Tyson Foods. In addition to that, ChampionX is 1.46 times more volatile than Tyson Foods. It trades about 0.01 of its total potential returns per unit of risk. Tyson Foods is currently generating about 0.03 per unit of volatility. If you would invest 5,218 in Tyson Foods on November 3, 2024 and sell it today you would earn a total of 431.00 from holding Tyson Foods or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Tyson Foods
Performance |
| Timeline |
| ChampionX |
| Tyson Foods |
ChampionX and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Tyson Foods
The main advantage of trading using opposite ChampionX and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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