Correlation Between Imperial Brands and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Imperial Brands and Dairy Farm 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 Imperial Brands and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Brands PLC and Dairy Farm International, you can compare the effects of market volatilities on Imperial Brands and Dairy Farm 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 Imperial Brands with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Brands and Dairy Farm.
Diversification Opportunities for Imperial Brands and Dairy Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Imperial and Dairy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Brands PLC and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and Imperial Brands 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 Imperial Brands PLC are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Imperial Brands i.e., Imperial Brands and Dairy Farm go up and down completely randomly.
Pair Corralation between Imperial Brands and Dairy Farm
If you would invest 256,400 in Imperial Brands PLC on October 26, 2024 and sell it today you would earn a total of 6,300 from holding Imperial Brands PLC or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Brands PLC vs. Dairy Farm International
Performance |
| Timeline |
| Imperial Brands PLC |
| Dairy Farm International |
Imperial Brands and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Brands and Dairy Farm
The main advantage of trading using opposite Imperial Brands and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Brands position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Imperial Brands vs. Teradata Corp | Imperial Brands vs. Gruppo MutuiOnline SpA | Imperial Brands vs. Herald Investment Trust | Imperial Brands vs. Ebro Foods |
| Dairy Farm vs. Silver Bullet Data | Dairy Farm vs. Qurate Retail Series | Dairy Farm vs. First Majestic Silver | Dairy Farm vs. DFS Furniture PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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