Correlation Between First Abacus and Swift Foods
Can any of the company-specific risk be diversified away by investing in both First Abacus and Swift Foods 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 First Abacus and Swift Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Abacus Financial and Swift Foods, you can compare the effects of market volatilities on First Abacus and Swift Foods 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 First Abacus with a short position of Swift Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Abacus and Swift Foods.
Diversification Opportunities for First Abacus and Swift Foods
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Swift is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding First Abacus Financial and Swift Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Foods and First Abacus 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 First Abacus Financial are associated (or correlated) with Swift Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Foods has no effect on the direction of First Abacus i.e., First Abacus and Swift Foods go up and down completely randomly.
Pair Corralation between First Abacus and Swift Foods
Assuming the 90 days trading horizon First Abacus Financial is expected to generate 0.87 times more return on investment than Swift Foods. However, First Abacus Financial is 1.15 times less risky than Swift Foods. It trades about 0.03 of its potential returns per unit of risk. Swift Foods is currently generating about 0.01 per unit of risk. If you would invest 68.00 in First Abacus Financial on September 1, 2024 and sell it today you would earn a total of 1.00 from holding First Abacus Financial or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.12% |
| Values | Daily Returns |
First Abacus Financial vs. Swift Foods
Performance |
| Timeline |
| First Abacus Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Swift Foods |
First Abacus and Swift Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Abacus and Swift Foods
The main advantage of trading using opposite First Abacus and Swift Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Abacus position performs unexpectedly, Swift Foods 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 Swift Foods will offset losses from the drop in Swift Foods' long position.| First Abacus vs. Bright Kindle Resources | First Abacus vs. Allhome Corp | First Abacus vs. LFM Properties Corp | First Abacus vs. Altus Property Ventures |
| Swift Foods vs. Metro Retail Stores | Swift Foods vs. Century Pacific Food | Swift Foods vs. Manila Mining Corp | Swift Foods vs. Apex Mining Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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