Correlation Between Dairy Farm and OFFICE DEPOT
Can any of the company-specific risk be diversified away by investing in both Dairy Farm and OFFICE DEPOT 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 OFFICE DEPOT 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 OFFICE DEPOT, you can compare the effects of market volatilities on Dairy Farm and OFFICE DEPOT 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 OFFICE DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and OFFICE DEPOT.
Diversification Opportunities for Dairy Farm and OFFICE DEPOT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dairy and OFFICE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International and OFFICE DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICE DEPOT 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 OFFICE DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICE DEPOT has no effect on the direction of Dairy Farm i.e., Dairy Farm and OFFICE DEPOT go up and down completely randomly.
Pair Corralation between Dairy Farm and OFFICE DEPOT
If you would invest 194.00 in Dairy Farm International on September 4, 2024 and sell it today you would earn a total of 34.00 from holding Dairy Farm International or generate 17.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. OFFICE DEPOT
Performance |
| Timeline |
| Dairy Farm International |
| OFFICE DEPOT |
Dairy Farm and OFFICE DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and OFFICE DEPOT
The main advantage of trading using opposite Dairy Farm and OFFICE DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm position performs unexpectedly, OFFICE DEPOT 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 OFFICE DEPOT will offset losses from the drop in OFFICE DEPOT's long position.| Dairy Farm vs. Seven i Holdings | Dairy Farm vs. AHOLD DELHAIADR16 EO 25 | Dairy Farm vs. Loblaw Companies Limited | Dairy Farm vs. TESCO PLC LS 0633333 |
| OFFICE DEPOT vs. TOTAL GABON | OFFICE DEPOT vs. Walgreens Boots Alliance | OFFICE DEPOT vs. Peak Resources Limited |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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