Correlation Between Allhome Corp and Figaro Coffee
Can any of the company-specific risk be diversified away by investing in both Allhome Corp and Figaro Coffee 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 Allhome Corp and Figaro Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allhome Corp and Figaro Coffee Group, you can compare the effects of market volatilities on Allhome Corp and Figaro Coffee 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 Allhome Corp with a short position of Figaro Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allhome Corp and Figaro Coffee.
Diversification Opportunities for Allhome Corp and Figaro Coffee
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allhome and Figaro is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Allhome Corp and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group and Allhome Corp 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 Allhome Corp are associated (or correlated) with Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of Allhome Corp i.e., Allhome Corp and Figaro Coffee go up and down completely randomly.
Pair Corralation between Allhome Corp and Figaro Coffee
Assuming the 90 days trading horizon Allhome Corp is expected to under-perform the Figaro Coffee. In addition to that, Allhome Corp is 1.01 times more volatile than Figaro Coffee Group. It trades about -0.04 of its total potential returns per unit of risk. Figaro Coffee Group is currently generating about 0.03 per unit of volatility. If you would invest 60.00 in Figaro Coffee Group on August 24, 2024 and sell it today you would earn a total of 20.00 from holding Figaro Coffee Group or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allhome Corp vs. Figaro Coffee Group
Performance |
| Timeline |
| Allhome Corp |
| Figaro Coffee Group |
Allhome Corp and Figaro Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allhome Corp and Figaro Coffee
The main advantage of trading using opposite Allhome Corp and Figaro Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allhome Corp position performs unexpectedly, Figaro Coffee 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 Figaro Coffee will offset losses from the drop in Figaro Coffee's long position.| Allhome Corp vs. Jollibee Foods Corp | Allhome Corp vs. LFM Properties Corp | Allhome Corp vs. PXP Energy Corp | Allhome Corp vs. Monde Nissin Corp |
| Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. Pacificonline Systems | Figaro Coffee vs. Allhome Corp | Figaro Coffee vs. LFM Properties 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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