Correlation Between Goodfood Market and Acadian Timber
Can any of the company-specific risk be diversified away by investing in both Goodfood Market and Acadian Timber 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 Goodfood Market and Acadian Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfood Market Corp and Acadian Timber Corp, you can compare the effects of market volatilities on Goodfood Market and Acadian Timber 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 Goodfood Market with a short position of Acadian Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and Acadian Timber.
Diversification Opportunities for Goodfood Market and Acadian Timber
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goodfood and Acadian is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and Acadian Timber Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Timber Corp and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with Acadian Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Timber Corp has no effect on the direction of Goodfood Market i.e., Goodfood Market and Acadian Timber go up and down completely randomly.
Pair Corralation between Goodfood Market and Acadian Timber
Assuming the 90 days trading horizon Goodfood Market Corp is expected to under-perform the Acadian Timber. In addition to that, Goodfood Market is 4.06 times more volatile than Acadian Timber Corp. It trades about -0.19 of its total potential returns per unit of risk. Acadian Timber Corp is currently generating about -0.15 per unit of volatility. If you would invest 1,785 in Acadian Timber Corp on December 8, 2024 and sell it today you would lose (63.00) from holding Acadian Timber Corp or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodfood Market Corp vs. Acadian Timber Corp
Performance |
| Timeline |
| Goodfood Market Corp |
| Acadian Timber Corp |
Goodfood Market and Acadian Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodfood Market and Acadian Timber
The main advantage of trading using opposite Goodfood Market and Acadian Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfood Market position performs unexpectedly, Acadian Timber 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 Acadian Timber will offset losses from the drop in Acadian Timber's long position.| Goodfood Market vs. WELL Health Technologies | ||
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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