Correlation Between Exchange Income and Rogers Sugar
Can any of the company-specific risk be diversified away by investing in both Exchange Income and Rogers Sugar 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 Exchange Income and Rogers Sugar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Income and Rogers Sugar, you can compare the effects of market volatilities on Exchange Income and Rogers Sugar 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 Exchange Income with a short position of Rogers Sugar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Income and Rogers Sugar.
Diversification Opportunities for Exchange Income and Rogers Sugar
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exchange and Rogers is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income and Rogers Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Sugar and Exchange Income 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 Exchange Income are associated (or correlated) with Rogers Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Sugar has no effect on the direction of Exchange Income i.e., Exchange Income and Rogers Sugar go up and down completely randomly.
Pair Corralation between Exchange Income and Rogers Sugar
Assuming the 90 days trading horizon Exchange Income is expected to generate 1.0 times more return on investment than Rogers Sugar. However, Exchange Income is 1.0 times more volatile than Rogers Sugar. It trades about 0.09 of its potential returns per unit of risk. Rogers Sugar is currently generating about 0.08 per unit of risk. If you would invest 4,760 in Exchange Income on August 25, 2024 and sell it today you would earn a total of 863.00 from holding Exchange Income or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Income vs. Rogers Sugar
Performance |
| Timeline |
| Exchange Income |
| Rogers Sugar |
Exchange Income and Rogers Sugar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Income and Rogers Sugar
The main advantage of trading using opposite Exchange Income and Rogers Sugar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Income position performs unexpectedly, Rogers Sugar 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 Rogers Sugar will offset losses from the drop in Rogers Sugar's long position.| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
| Rogers Sugar vs. Extendicare | Rogers Sugar vs. Pizza Pizza Royalty | Rogers Sugar vs. Chemtrade Logistics Income | Rogers Sugar vs. Sienna Senior Living |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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