Correlation Between Foodlink and Frigoglass SAIC
Can any of the company-specific risk be diversified away by investing in both Foodlink and Frigoglass SAIC 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 Foodlink and Frigoglass SAIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foodlink AE and Frigoglass SAIC, you can compare the effects of market volatilities on Foodlink and Frigoglass SAIC 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 Foodlink with a short position of Frigoglass SAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodlink and Frigoglass SAIC.
Diversification Opportunities for Foodlink and Frigoglass SAIC
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Foodlink and Frigoglass is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Foodlink AE and Frigoglass SAIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frigoglass SAIC and Foodlink 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 Foodlink AE are associated (or correlated) with Frigoglass SAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frigoglass SAIC has no effect on the direction of Foodlink i.e., Foodlink and Frigoglass SAIC go up and down completely randomly.
Pair Corralation between Foodlink and Frigoglass SAIC
Assuming the 90 days trading horizon Foodlink AE is expected to generate 0.59 times more return on investment than Frigoglass SAIC. However, Foodlink AE is 1.7 times less risky than Frigoglass SAIC. It trades about 0.16 of its potential returns per unit of risk. Frigoglass SAIC is currently generating about -0.03 per unit of risk. If you would invest 33.00 in Foodlink AE on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Foodlink AE or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Foodlink AE vs. Frigoglass SAIC
Performance |
| Timeline |
| Foodlink AE |
| Frigoglass SAIC |
Foodlink and Frigoglass SAIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foodlink and Frigoglass SAIC
The main advantage of trading using opposite Foodlink and Frigoglass SAIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodlink position performs unexpectedly, Frigoglass SAIC 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 Frigoglass SAIC will offset losses from the drop in Frigoglass SAIC's long position.| Foodlink vs. Frigoglass SAIC | Foodlink vs. Autohellas SA | Foodlink vs. Public Power | Foodlink vs. Intralot SA Integrated |
| Frigoglass SAIC vs. Public Power | Frigoglass SAIC vs. Intralot SA Integrated | Frigoglass SAIC vs. Hellenic Petroleum SA | Frigoglass SAIC vs. Mytilineos SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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