Correlation Between Fresh Del and Shineco
Can any of the company-specific risk be diversified away by investing in both Fresh Del and Shineco 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 Fresh Del and Shineco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Del Monte and Shineco, you can compare the effects of market volatilities on Fresh Del and Shineco 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 Fresh Del with a short position of Shineco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and Shineco.
Diversification Opportunities for Fresh Del and Shineco
Excellent diversification
The 3 months correlation between Fresh and Shineco is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Shineco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shineco and Fresh Del 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 Fresh Del Monte are associated (or correlated) with Shineco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shineco has no effect on the direction of Fresh Del i.e., Fresh Del and Shineco go up and down completely randomly.
Pair Corralation between Fresh Del and Shineco
Considering the 90-day investment horizon Fresh Del Monte is expected to generate 0.2 times more return on investment than Shineco. However, Fresh Del Monte is 5.01 times less risky than Shineco. It trades about 0.13 of its potential returns per unit of risk. Shineco is currently generating about -0.22 per unit of risk. If you would invest 2,943 in Fresh Del Monte on September 2, 2024 and sell it today you would earn a total of 432.00 from holding Fresh Del Monte or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Del Monte vs. Shineco
Performance |
| Timeline |
| Fresh Del Monte |
| Shineco |
Fresh Del and Shineco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Del and Shineco
The main advantage of trading using opposite Fresh Del and Shineco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Del position performs unexpectedly, Shineco 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 Shineco will offset losses from the drop in Shineco's long position.The idea behind Fresh Del Monte and Shineco pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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