Correlation Between Foot Locker and SGHC
Can any of the company-specific risk be diversified away by investing in both Foot Locker and SGHC 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 Foot Locker and SGHC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and SGHC Limited, you can compare the effects of market volatilities on Foot Locker and SGHC 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 Foot Locker with a short position of SGHC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and SGHC.
Diversification Opportunities for Foot Locker and SGHC
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Foot and SGHC is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker and SGHC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGHC Limited and Foot Locker 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 Foot Locker are associated (or correlated) with SGHC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGHC Limited has no effect on the direction of Foot Locker i.e., Foot Locker and SGHC go up and down completely randomly.
Pair Corralation between Foot Locker and SGHC
Allowing for the 90-day total investment horizon Foot Locker is expected to generate 11.28 times less return on investment than SGHC. But when comparing it to its historical volatility, Foot Locker is 1.96 times less risky than SGHC. It trades about 0.07 of its potential returns per unit of risk. SGHC Limited is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 417.00 in SGHC Limited on August 28, 2024 and sell it today you would earn a total of 199.00 from holding SGHC Limited or generate 47.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. SGHC Limited
Performance |
| Timeline |
| Foot Locker |
| SGHC Limited |
Foot Locker and SGHC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and SGHC
The main advantage of trading using opposite Foot Locker and SGHC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker position performs unexpectedly, SGHC 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 SGHC will offset losses from the drop in SGHC's long position.| Foot Locker vs. Abercrombie Fitch | Foot Locker vs. Urban Outfitters | Foot Locker vs. Childrens Place | Foot Locker vs. American Eagle Outfitters |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |