Correlation Between Collins Foods and Summerset Group
Can any of the company-specific risk be diversified away by investing in both Collins Foods and Summerset Group 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 Collins Foods and Summerset Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Summerset Group Holdings, you can compare the effects of market volatilities on Collins Foods and Summerset Group 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 Collins Foods with a short position of Summerset Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Summerset Group.
Diversification Opportunities for Collins Foods and Summerset Group
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Collins and Summerset is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods and Summerset Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summerset Group Holdings and Collins 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 Collins Foods are associated (or correlated) with Summerset Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summerset Group Holdings has no effect on the direction of Collins Foods i.e., Collins Foods and Summerset Group go up and down completely randomly.
Pair Corralation between Collins Foods and Summerset Group
Assuming the 90 days trading horizon Collins Foods is expected to under-perform the Summerset Group. In addition to that, Collins Foods is 1.0 times more volatile than Summerset Group Holdings. It trades about -0.21 of its total potential returns per unit of risk. Summerset Group Holdings is currently generating about 0.11 per unit of volatility. If you would invest 1,140 in Summerset Group Holdings on September 12, 2024 and sell it today you would earn a total of 29.00 from holding Summerset Group Holdings or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods vs. Summerset Group Holdings
Performance |
| Timeline |
| Collins Foods |
| Summerset Group Holdings |
Collins Foods and Summerset Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Summerset Group
The main advantage of trading using opposite Collins Foods and Summerset Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, Summerset Group 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 Summerset Group will offset losses from the drop in Summerset Group's long position.| Collins Foods vs. Homeco Daily Needs | Collins Foods vs. Australian Unity Office | Collins Foods vs. Farm Pride Foods | Collins Foods vs. Viva Leisure |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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