Correlation Between Coles and Saferoads Holdings
Can any of the company-specific risk be diversified away by investing in both Coles and Saferoads Holdings 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 Coles and Saferoads Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coles Group and Saferoads Holdings, you can compare the effects of market volatilities on Coles and Saferoads Holdings 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 Coles with a short position of Saferoads Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coles and Saferoads Holdings.
Diversification Opportunities for Coles and Saferoads Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coles and Saferoads is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coles Group and Saferoads Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saferoads Holdings and Coles 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 Coles Group are associated (or correlated) with Saferoads Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saferoads Holdings has no effect on the direction of Coles i.e., Coles and Saferoads Holdings go up and down completely randomly.
Pair Corralation between Coles and Saferoads Holdings
If you would invest 1,759 in Coles Group on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Coles Group or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Coles Group vs. Saferoads Holdings
Performance |
| Timeline |
| Coles Group |
| Saferoads Holdings |
Coles and Saferoads Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coles and Saferoads Holdings
The main advantage of trading using opposite Coles and Saferoads Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coles position performs unexpectedly, Saferoads Holdings 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 Saferoads Holdings will offset losses from the drop in Saferoads Holdings' long position.The idea behind Coles Group and Saferoads Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Saferoads Holdings vs. National Australia Bank | Saferoads Holdings vs. National Australia Bank | Saferoads Holdings vs. Westpac Banking | Saferoads Holdings vs. National Australia Bank |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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