Correlation Between Flowers Foods and DDC Enterprise
Can any of the company-specific risk be diversified away by investing in both Flowers Foods and DDC Enterprise 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 Flowers Foods and DDC Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and DDC Enterprise Limited, you can compare the effects of market volatilities on Flowers Foods and DDC Enterprise 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 Flowers Foods with a short position of DDC Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and DDC Enterprise.
Diversification Opportunities for Flowers Foods and DDC Enterprise
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flowers and DDC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and DDC Enterprise Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DDC Enterprise and Flowers Foods 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 Flowers Foods are associated (or correlated) with DDC Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DDC Enterprise has no effect on the direction of Flowers Foods i.e., Flowers Foods and DDC Enterprise go up and down completely randomly.
Pair Corralation between Flowers Foods and DDC Enterprise
Considering the 90-day investment horizon Flowers Foods is expected to generate 0.09 times more return on investment than DDC Enterprise. However, Flowers Foods is 11.75 times less risky than DDC Enterprise. It trades about -0.02 of its potential returns per unit of risk. DDC Enterprise Limited is currently generating about -0.04 per unit of risk. If you would invest 2,687 in Flowers Foods on September 2, 2024 and sell it today you would lose (425.00) from holding Flowers Foods or give up 15.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 52.42% |
| Values | Daily Returns |
Flowers Foods vs. DDC Enterprise Limited
Performance |
| Timeline |
| Flowers Foods |
| DDC Enterprise |
Flowers Foods and DDC Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowers Foods and DDC Enterprise
The main advantage of trading using opposite Flowers Foods and DDC Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods position performs unexpectedly, DDC Enterprise 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 DDC Enterprise will offset losses from the drop in DDC Enterprise's long position.| Flowers Foods vs. ConAgra Foods | Flowers Foods vs. McCormick Company Incorporated | Flowers Foods vs. Campbell Soup | Flowers Foods vs. Kellanova |
| DDC Enterprise vs. Monster Beverage Corp | DDC Enterprise vs. Hooker Furniture | DDC Enterprise vs. Keurig Dr Pepper | DDC Enterprise vs. Molson Coors Brewing |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |