Correlation Between Edita Food and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Edita Food and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Edita Food and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Bankers Investment.
Diversification Opportunities for Edita Food and Bankers Investment
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Edita and Bankers is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Edita Food i.e., Edita Food and Bankers Investment go up and down completely randomly.
Pair Corralation between Edita Food and Bankers Investment
Assuming the 90 days trading horizon Edita Food Industries is expected to under-perform the Bankers Investment. In addition to that, Edita Food is 10.15 times more volatile than Bankers Investment Trust. It trades about -0.19 of its total potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.15 per unit of volatility. If you would invest 11,280 in Bankers Investment Trust on August 26, 2024 and sell it today you would earn a total of 200.00 from holding Bankers Investment Trust or generate 1.77% 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. Bankers Investment Trust
Performance |
| Timeline |
| Edita Food Industries |
| Bankers Investment Trust |
Edita Food and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Bankers Investment
The main advantage of trading using opposite Edita Food and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Edita Food vs. Samsung Electronics Co | Edita Food vs. Samsung Electronics Co | Edita Food vs. Hyundai Motor | Edita Food vs. Toyota Motor Corp |
| Bankers Investment vs. GoldMining | Bankers Investment vs. AfriTin Mining | Bankers Investment vs. Metals Exploration Plc | Bankers Investment vs. Thor Mining 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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