Correlation Between Fomento Económico and Barfresh Food
Can any of the company-specific risk be diversified away by investing in both Fomento Económico and Barfresh Food 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 Fomento Económico and Barfresh Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento Econmico Mexicano and Barfresh Food Group, you can compare the effects of market volatilities on Fomento Económico and Barfresh Food 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 Fomento Económico with a short position of Barfresh Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Económico and Barfresh Food.
Diversification Opportunities for Fomento Económico and Barfresh Food
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fomento and Barfresh is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Econmico Mexicano and Barfresh Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barfresh Food Group and Fomento Económico 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 Fomento Econmico Mexicano are associated (or correlated) with Barfresh Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barfresh Food Group has no effect on the direction of Fomento Económico i.e., Fomento Económico and Barfresh Food go up and down completely randomly.
Pair Corralation between Fomento Económico and Barfresh Food
Assuming the 90 days horizon Fomento Económico is expected to generate 10.57 times less return on investment than Barfresh Food. But when comparing it to its historical volatility, Fomento Econmico Mexicano is 1.67 times less risky than Barfresh Food. It trades about 0.01 of its potential returns per unit of risk. Barfresh Food Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Barfresh Food Group on August 31, 2024 and sell it today you would earn a total of 164.00 from holding Barfresh Food Group or generate 126.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 56.03% |
| Values | Daily Returns |
Fomento Econmico Mexicano vs. Barfresh Food Group
Performance |
| Timeline |
| Fomento Econmico Mexicano |
| Barfresh Food Group |
Fomento Económico and Barfresh Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fomento Económico and Barfresh Food
The main advantage of trading using opposite Fomento Económico and Barfresh Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Económico position performs unexpectedly, Barfresh Food 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 Barfresh Food will offset losses from the drop in Barfresh Food's long position.| Fomento Económico vs. Barfresh Food Group | Fomento Económico vs. Fbec Worldwide | Fomento Económico vs. Flow Beverage Corp | Fomento Económico vs. Eq Energy Drink |
| Barfresh Food vs. Flow Beverage Corp | Barfresh Food vs. Fbec Worldwide | Barfresh Food vs. Hill Street Beverage | Barfresh Food vs. Eq Energy Drink |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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