Correlation Between Comcast and Food Life
Can any of the company-specific risk be diversified away by investing in both Comcast and Food Life 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 Comcast and Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comcast and Food Life Companies, you can compare the effects of market volatilities on Comcast and Food Life 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 Comcast with a short position of Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comcast and Food Life.
Diversification Opportunities for Comcast and Food Life
Poor diversification
The 3 months correlation between Comcast and Food is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Comcast and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies and Comcast 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 Comcast are associated (or correlated) with Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of Comcast i.e., Comcast and Food Life go up and down completely randomly.
Pair Corralation between Comcast and Food Life
Assuming the 90 days trading horizon Comcast is expected to under-perform the Food Life. In addition to that, Comcast is 1.2 times more volatile than Food Life Companies. It trades about -0.2 of its total potential returns per unit of risk. Food Life Companies is currently generating about 0.39 per unit of volatility. If you would invest 1,890 in Food Life Companies on September 13, 2024 and sell it today you would earn a total of 310.00 from holding Food Life Companies or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Comcast vs. Food Life Companies
Performance |
| Timeline |
| Comcast |
| Food Life Companies |
Comcast and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Comcast and Food Life
The main advantage of trading using opposite Comcast and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comcast position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| Comcast vs. UPDATE SOFTWARE | Comcast vs. CN MODERN DAIRY | Comcast vs. Guidewire Software | Comcast vs. FORMPIPE SOFTWARE AB |
| Food Life vs. Starbucks | Food Life vs. Superior Plus Corp | Food Life vs. SIVERS SEMICONDUCTORS AB | Food Life vs. NorAm Drilling AS |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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