Correlation Between Orange SA and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Orange SA and RETAIL 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 Orange SA and RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA and RETAIL FOOD GROUP, you can compare the effects of market volatilities on Orange SA and RETAIL 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 Orange SA with a short position of RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and RETAIL FOOD.
Diversification Opportunities for Orange SA and RETAIL FOOD
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orange and RETAIL is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP and Orange SA 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 Orange SA are associated (or correlated) with RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Orange SA i.e., Orange SA and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Orange SA and RETAIL FOOD
Assuming the 90 days horizon Orange SA is expected to under-perform the RETAIL FOOD. But the stock apears to be less risky and, when comparing its historical volatility, Orange SA is 2.37 times less risky than RETAIL FOOD. The stock trades about -0.03 of its potential returns per unit of risk. The RETAIL FOOD GROUP is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.55 in RETAIL FOOD GROUP on September 3, 2024 and sell it today you would earn a total of 0.65 from holding RETAIL FOOD GROUP or generate 18.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orange SA vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Orange SA |
| RETAIL FOOD GROUP |
Orange SA and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and RETAIL FOOD
The main advantage of trading using opposite Orange SA and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA position performs unexpectedly, RETAIL 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Orange SA vs. PACIFIC ONLINE | Orange SA vs. Natural Health Trends | Orange SA vs. GUARDANT HEALTH CL | Orange SA vs. CODERE ONLINE LUX |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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