Correlation Between Central Industries and Convenience Foods
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By analyzing existing cross correlation between Central Industries PLC and Convenience Foods PLC, you can compare the effects of market volatilities on Central Industries and Convenience 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 Central Industries with a short position of Convenience Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Industries and Convenience Foods.
Diversification Opportunities for Central Industries and Convenience Foods
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Central and Convenience is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Central Industries PLC and Convenience Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Convenience Foods PLC and Central Industries 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 Industries PLC are associated (or correlated) with Convenience Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Convenience Foods PLC has no effect on the direction of Central Industries i.e., Central Industries and Convenience Foods go up and down completely randomly.
Pair Corralation between Central Industries and Convenience Foods
Assuming the 90 days trading horizon Central Industries PLC is expected to generate 1.22 times more return on investment than Convenience Foods. However, Central Industries is 1.22 times more volatile than Convenience Foods PLC. It trades about 0.07 of its potential returns per unit of risk. Convenience Foods PLC is currently generating about -0.06 per unit of risk. If you would invest 6,290 in Central Industries PLC on September 5, 2024 and sell it today you would earn a total of 5,310 from holding Central Industries PLC or generate 84.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.06% |
| Values | Daily Returns |
Central Industries PLC vs. Convenience Foods PLC
Performance |
| Timeline |
| Central Industries PLC |
| Convenience Foods PLC |
Central Industries and Convenience Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Industries and Convenience Foods
The main advantage of trading using opposite Central Industries and Convenience Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Industries position performs unexpectedly, Convenience 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 Convenience Foods will offset losses from the drop in Convenience Foods' long position.| Central Industries vs. Convenience Foods PLC | Central Industries vs. Ceylinco Insurance PLC | Central Industries vs. RENUKA FOODS PLC | Central Industries vs. HATTON NATIONAL BANK |
| Convenience Foods vs. Singhe Hospitals | Convenience Foods vs. Commercial Credit and | Convenience Foods vs. Renuka Agri Foods | Convenience Foods vs. Janashakthi Insurance |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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