Correlation Between Dairy Farm and SOEDER SPORTFISKE
Can any of the company-specific risk be diversified away by investing in both Dairy Farm and SOEDER SPORTFISKE 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 Dairy Farm and SOEDER SPORTFISKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and SOEDER SPORTFISKE AB, you can compare the effects of market volatilities on Dairy Farm and SOEDER SPORTFISKE 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 Dairy Farm with a short position of SOEDER SPORTFISKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and SOEDER SPORTFISKE.
Diversification Opportunities for Dairy Farm and SOEDER SPORTFISKE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dairy and SOEDER is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International and SOEDER SPORTFISKE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOEDER SPORTFISKE and Dairy Farm 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 Dairy Farm International are associated (or correlated) with SOEDER SPORTFISKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOEDER SPORTFISKE has no effect on the direction of Dairy Farm i.e., Dairy Farm and SOEDER SPORTFISKE go up and down completely randomly.
Pair Corralation between Dairy Farm and SOEDER SPORTFISKE
Assuming the 90 days trading horizon Dairy Farm International is expected to under-perform the SOEDER SPORTFISKE. But the stock apears to be less risky and, when comparing its historical volatility, Dairy Farm International is 2.32 times less risky than SOEDER SPORTFISKE. The stock trades about -0.06 of its potential returns per unit of risk. The SOEDER SPORTFISKE AB is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 208.00 in SOEDER SPORTFISKE AB on October 25, 2024 and sell it today you would earn a total of 57.00 from holding SOEDER SPORTFISKE AB or generate 27.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. SOEDER SPORTFISKE AB
Performance |
| Timeline |
| Dairy Farm International |
| SOEDER SPORTFISKE |
Dairy Farm and SOEDER SPORTFISKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and SOEDER SPORTFISKE
The main advantage of trading using opposite Dairy Farm and SOEDER SPORTFISKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm position performs unexpectedly, SOEDER SPORTFISKE 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 SOEDER SPORTFISKE will offset losses from the drop in SOEDER SPORTFISKE's long position.| Dairy Farm vs. Highlight Communications AG | Dairy Farm vs. Entravision Communications | Dairy Farm vs. Charter Communications | Dairy Farm vs. MACOM Technology Solutions |
| SOEDER SPORTFISKE vs. TreeHouse Foods | SOEDER SPORTFISKE vs. PURE FOODS TASMANIA | SOEDER SPORTFISKE vs. CAL MAINE FOODS | SOEDER SPORTFISKE vs. SENECA FOODS A |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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