Correlation Between DFS Furniture and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Beyond Meat 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 DFS Furniture and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Beyond Meat, you can compare the effects of market volatilities on DFS Furniture and Beyond Meat 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 DFS Furniture with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Beyond Meat.
Diversification Opportunities for DFS Furniture and Beyond Meat
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between DFS and Beyond is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of DFS Furniture i.e., DFS Furniture and Beyond Meat go up and down completely randomly.
Pair Corralation between DFS Furniture and Beyond Meat
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.49 times more return on investment than Beyond Meat. However, DFS Furniture PLC is 2.05 times less risky than Beyond Meat. It trades about 0.06 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.01 per unit of risk. If you would invest 119.00 in DFS Furniture PLC on August 29, 2024 and sell it today you would earn a total of 39.00 from holding DFS Furniture PLC or generate 32.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Beyond Meat
Performance |
| Timeline |
| DFS Furniture PLC |
| Beyond Meat |
DFS Furniture and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Beyond Meat
The main advantage of trading using opposite DFS Furniture and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| DFS Furniture vs. Sunny Optical Technology | DFS Furniture vs. CITY OFFICE REIT | DFS Furniture vs. Luckin Coffee | DFS Furniture vs. SWISS WATER DECAFFCOFFEE |
| Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc | Beyond Meat vs. Apple Inc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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