Correlation Between Collins Foods and Unibail Rodamco
Can any of the company-specific risk be diversified away by investing in both Collins Foods and Unibail Rodamco 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 Unibail Rodamco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Unibail Rodamco Westfield SE, you can compare the effects of market volatilities on Collins Foods and Unibail Rodamco 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 Unibail Rodamco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Unibail Rodamco.
Diversification Opportunities for Collins Foods and Unibail Rodamco
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Collins and Unibail is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods and Unibail Rodamco Westfield SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibail Rodamco West 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 Unibail Rodamco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibail Rodamco West has no effect on the direction of Collins Foods i.e., Collins Foods and Unibail Rodamco go up and down completely randomly.
Pair Corralation between Collins Foods and Unibail Rodamco
Assuming the 90 days trading horizon Collins Foods is expected to generate 1.29 times more return on investment than Unibail Rodamco. However, Collins Foods is 1.29 times more volatile than Unibail Rodamco Westfield SE. It trades about -0.01 of its potential returns per unit of risk. Unibail Rodamco Westfield SE is currently generating about -0.02 per unit of risk. If you would invest 910.00 in Collins Foods on August 31, 2024 and sell it today you would lose (51.00) from holding Collins Foods or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods vs. Unibail Rodamco Westfield SE
Performance |
| Timeline |
| Collins Foods |
| Unibail Rodamco West |
Collins Foods and Unibail Rodamco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Unibail Rodamco
The main advantage of trading using opposite Collins Foods and Unibail Rodamco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, Unibail Rodamco 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 Unibail Rodamco will offset losses from the drop in Unibail Rodamco's long position.| Collins Foods vs. Aneka Tambang Tbk | Collins Foods vs. Unibail Rodamco Westfield SE | Collins Foods vs. Macquarie Group | Collins Foods vs. Commonwealth Bank |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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