Correlation Between Edita Food and Bell Food
Can any of the company-specific risk be diversified away by investing in both Edita Food and Bell Food 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 Bell Food 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 Bell Food Group, you can compare the effects of market volatilities on Edita Food and Bell Food 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 Bell Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Bell Food.
Diversification Opportunities for Edita Food and Bell Food
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Edita and Bell is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Bell Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bell Food Group 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 Bell Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bell Food Group has no effect on the direction of Edita Food i.e., Edita Food and Bell Food go up and down completely randomly.
Pair Corralation between Edita Food and Bell Food
Assuming the 90 days trading horizon Edita Food Industries is expected to generate 2.65 times more return on investment than Bell Food. However, Edita Food is 2.65 times more volatile than Bell Food Group. It trades about 0.01 of its potential returns per unit of risk. Bell Food Group is currently generating about -0.01 per unit of risk. If you would invest 206.00 in Edita Food Industries on November 28, 2024 and sell it today you would lose (20.00) from holding Edita Food Industries or give up 9.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.74% |
| Values | Daily Returns |
Edita Food Industries vs. Bell Food Group
Performance |
| Timeline |
| Edita Food Industries |
| Bell Food Group |
Edita Food and Bell Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Bell Food
The main advantage of trading using opposite Edita Food and Bell Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, Bell Food 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 Bell Food will offset losses from the drop in Bell Food's long position.| Edita Food vs. Omega Healthcare Investors | Edita Food vs. CVS Health Corp | Edita Food vs. Bellevue Healthcare Trust | Edita Food vs. Aeorema Communications Plc |
| Bell Food vs. Metals Exploration Plc | Bell Food vs. Atalaya Mining | Bell Food vs. Empire Metals Limited | Bell Food vs. Fulcrum Metals PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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