Correlation Between Garda Diversified and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Garda Diversified and Collins Foods 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 Garda Diversified and Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garda Diversified Ppty and Collins Foods, you can compare the effects of market volatilities on Garda Diversified and Collins Foods 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 Garda Diversified with a short position of Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Collins Foods.
Diversification Opportunities for Garda Diversified and Collins Foods
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Garda and Collins is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods and Garda Diversified 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 Garda Diversified Ppty are associated (or correlated) with Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Garda Diversified i.e., Garda Diversified and Collins Foods go up and down completely randomly.
Pair Corralation between Garda Diversified and Collins Foods
Assuming the 90 days trading horizon Garda Diversified Ppty is expected to under-perform the Collins Foods. But the stock apears to be less risky and, when comparing its historical volatility, Garda Diversified Ppty is 1.16 times less risky than Collins Foods. The stock trades about -0.22 of its potential returns per unit of risk. The Collins Foods is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 733.00 in Collins Foods on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Collins Foods or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garda Diversified Ppty vs. Collins Foods
Performance |
| Timeline |
| Garda Diversified Ppty |
| Collins Foods |
Garda Diversified and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garda Diversified and Collins Foods
The main advantage of trading using opposite Garda Diversified and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Garda Diversified vs. Charter Hall Retail | Garda Diversified vs. Cromwell Property Group | Garda Diversified vs. Australian Unity Office | Garda Diversified vs. Ecofibre |
| Collins Foods vs. Aneka Tambang Tbk | Collins Foods vs. Macquarie Group | Collins Foods vs. Macquarie Group Ltd | Collins Foods vs. Challenger |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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