Correlation Between Compass Group and Xiabuxiabu Catering
Can any of the company-specific risk be diversified away by investing in both Compass Group and Xiabuxiabu Catering 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 Compass Group and Xiabuxiabu Catering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compass Group PLC and Xiabuxiabu Catering Management, you can compare the effects of market volatilities on Compass Group and Xiabuxiabu Catering 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 Compass Group with a short position of Xiabuxiabu Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compass Group and Xiabuxiabu Catering.
Diversification Opportunities for Compass Group and Xiabuxiabu Catering
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compass and Xiabuxiabu is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Compass Group PLC and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering and Compass Group 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 Compass Group PLC are associated (or correlated) with Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of Compass Group i.e., Compass Group and Xiabuxiabu Catering go up and down completely randomly.
Pair Corralation between Compass Group and Xiabuxiabu Catering
Assuming the 90 days horizon Compass Group PLC is expected to generate 0.52 times more return on investment than Xiabuxiabu Catering. However, Compass Group PLC is 1.92 times less risky than Xiabuxiabu Catering. It trades about 0.18 of its potential returns per unit of risk. Xiabuxiabu Catering Management is currently generating about -0.21 per unit of risk. If you would invest 3,260 in Compass Group PLC on November 3, 2024 and sell it today you would earn a total of 205.00 from holding Compass Group PLC or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compass Group PLC vs. Xiabuxiabu Catering Management
Performance |
| Timeline |
| Compass Group PLC |
| Xiabuxiabu Catering |
Compass Group and Xiabuxiabu Catering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compass Group and Xiabuxiabu Catering
The main advantage of trading using opposite Compass Group and Xiabuxiabu Catering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compass Group position performs unexpectedly, Xiabuxiabu Catering 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 Xiabuxiabu Catering will offset losses from the drop in Xiabuxiabu Catering's long position.| Compass Group vs. The Cheesecake Factory | Compass Group vs. Darden Restaurants | Compass Group vs. Wingstop | Compass Group vs. Dominos Pizza Common |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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