Correlation Between Edita Food and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Edita Food and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on Edita Food and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Beeks Trading.
Diversification Opportunities for Edita Food and Beeks Trading
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edita and Beeks is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Edita Food i.e., Edita Food and Beeks Trading go up and down completely randomly.
Pair Corralation between Edita Food and Beeks Trading
Assuming the 90 days trading horizon Edita Food is expected to generate 5.93 times less return on investment than Beeks Trading. But when comparing it to its historical volatility, Edita Food Industries is 4.49 times less risky than Beeks Trading. It trades about 0.21 of its potential returns per unit of risk. Beeks Trading is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 25,600 in Beeks Trading on September 14, 2024 and sell it today you would earn a total of 4,000 from holding Beeks Trading or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Beeks Trading
Performance |
| Timeline |
| Edita Food Industries |
| Beeks Trading |
Edita Food and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Beeks Trading
The main advantage of trading using opposite Edita Food and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Edita Food vs. Walmart | Edita Food vs. BYD Co | Edita Food vs. Volkswagen AG Non Vtg | Edita Food vs. Compass Group PLC |
| Beeks Trading vs. Edita Food Industries | Beeks Trading vs. BW Offshore | Beeks Trading vs. Hilton Food Group | Beeks Trading vs. Supermarket Income REIT |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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