Correlation Between Goodfood Market and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both Goodfood Market and Diamond Estates 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 Diamond Estates 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 Diamond Estates Wines, you can compare the effects of market volatilities on Goodfood Market and Diamond Estates 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 Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and Diamond Estates.
Diversification Opportunities for Goodfood Market and Diamond Estates
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goodfood and Diamond is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines 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 Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of Goodfood Market i.e., Goodfood Market and Diamond Estates go up and down completely randomly.
Pair Corralation between Goodfood Market and Diamond Estates
Assuming the 90 days trading horizon Goodfood Market Corp is expected to generate 1.24 times more return on investment than Diamond Estates. However, Goodfood Market is 1.24 times more volatile than Diamond Estates Wines. It trades about 0.37 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about -0.18 per unit of risk. If you would invest 27.00 in Goodfood Market Corp on August 24, 2024 and sell it today you would earn a total of 18.00 from holding Goodfood Market Corp or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Goodfood Market Corp vs. Diamond Estates Wines
Performance |
| Timeline |
| Goodfood Market Corp |
| Diamond Estates Wines |
Goodfood Market and Diamond Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodfood Market and Diamond Estates
The main advantage of trading using opposite Goodfood Market and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfood Market position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.| Goodfood Market vs. Restaurant Brands International | Goodfood Market vs. Enghouse Systems | Goodfood Market vs. Metro Inc | Goodfood Market vs. goeasy |
| Diamond Estates vs. Primaris Retail RE | Diamond Estates vs. Canso Select Opportunities | Diamond Estates vs. Goodfood Market Corp | Diamond Estates vs. Profound Medical Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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