Correlation Between Edita Food and Bank of Georgia
Can any of the company-specific risk be diversified away by investing in both Edita Food and Bank of Georgia 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 Bank of Georgia 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 Bank of Georgia, you can compare the effects of market volatilities on Edita Food and Bank of Georgia 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 Bank of Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Bank of Georgia.
Diversification Opportunities for Edita Food and Bank of Georgia
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edita and Bank is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Bank of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Georgia 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 Bank of Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Georgia has no effect on the direction of Edita Food i.e., Edita Food and Bank of Georgia go up and down completely randomly.
Pair Corralation between Edita Food and Bank of Georgia
If you would invest 456,000 in Bank of Georgia on October 12, 2024 and sell it today you would earn a total of 2,500 from holding Bank of Georgia or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Edita Food Industries vs. Bank of Georgia
Performance |
| Timeline |
| Edita Food Industries |
| Bank of Georgia |
Edita Food and Bank of Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Bank of Georgia
The main advantage of trading using opposite Edita Food and Bank of Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, Bank of Georgia 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 Bank of Georgia will offset losses from the drop in Bank of Georgia's long position.| Edita Food vs. Jupiter Fund Management | Edita Food vs. Iron Mountain | Edita Food vs. Dentsply Sirona | Edita Food vs. Alfa Financial Software |
| Bank of Georgia vs. Tyson Foods Cl | Bank of Georgia vs. Axfood AB | Bank of Georgia vs. Ecclesiastical Insurance Office | Bank of Georgia vs. Edita Food Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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