Correlation Between Edita Food and ODIN Investments
Can any of the company-specific risk be diversified away by investing in both Edita Food and ODIN Investments 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 Edita Food and ODIN Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and ODIN Investments, you can compare the effects of market volatilities on Edita Food and ODIN Investments 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 Edita Food with a short position of ODIN Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and ODIN Investments.
Diversification Opportunities for Edita Food and ODIN Investments
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Edita and ODIN is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and ODIN Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODIN Investments and Edita Food 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 Edita Food Industries are associated (or correlated) with ODIN Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODIN Investments has no effect on the direction of Edita Food i.e., Edita Food and ODIN Investments go up and down completely randomly.
Pair Corralation between Edita Food and ODIN Investments
Assuming the 90 days trading horizon Edita Food Industries is expected to generate 0.7 times more return on investment than ODIN Investments. However, Edita Food Industries is 1.43 times less risky than ODIN Investments. It trades about 0.08 of its potential returns per unit of risk. ODIN Investments is currently generating about 0.02 per unit of risk. If you would invest 1,491 in Edita Food Industries on December 25, 2024 and sell it today you would earn a total of 1,306 from holding Edita Food Industries or generate 87.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. ODIN Investments
Performance |
| Timeline |
| Edita Food Industries |
| ODIN Investments |
Edita Food and ODIN Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and ODIN Investments
The main advantage of trading using opposite Edita Food and ODIN Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, ODIN Investments 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 ODIN Investments will offset losses from the drop in ODIN Investments' long position.| Edita Food vs. Misr Financial Investments | Edita Food vs. Lotus For Agricultural | Edita Food vs. Reacap Financial Investments | Edita Food vs. B Investments Holding |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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