Correlation Between INDUSTRIAL MEDICAL and BUA FOODS

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Can any of the company-specific risk be diversified away by investing in both INDUSTRIAL MEDICAL and BUA 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 INDUSTRIAL MEDICAL and BUA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDUSTRIAL MEDICAL GASES and BUA FOODS PLC, you can compare the effects of market volatilities on INDUSTRIAL MEDICAL and BUA 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 INDUSTRIAL MEDICAL with a short position of BUA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDUSTRIAL MEDICAL and BUA FOODS.

Diversification Opportunities for INDUSTRIAL MEDICAL and BUA FOODS

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between INDUSTRIAL and BUA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INDUSTRIAL MEDICAL GASES and BUA FOODS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BUA FOODS PLC and INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL GASES are associated (or correlated) with BUA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BUA FOODS PLC has no effect on the direction of INDUSTRIAL MEDICAL i.e., INDUSTRIAL MEDICAL and BUA FOODS go up and down completely randomly.

Pair Corralation between INDUSTRIAL MEDICAL and BUA FOODS

If you would invest  39,490  in BUA FOODS PLC on September 14, 2024 and sell it today you would earn a total of  0.00  from holding BUA FOODS PLC or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

INDUSTRIAL MEDICAL GASES  vs.  BUA FOODS PLC

 Performance 
       Timeline  
INDUSTRIAL MEDICAL GASES 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in INDUSTRIAL MEDICAL GASES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, INDUSTRIAL MEDICAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.
BUA FOODS PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BUA FOODS PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, BUA FOODS is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

INDUSTRIAL MEDICAL and BUA FOODS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with INDUSTRIAL MEDICAL and BUA FOODS

The main advantage of trading using opposite INDUSTRIAL MEDICAL and BUA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDUSTRIAL MEDICAL position performs unexpectedly, BUA 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 BUA FOODS will offset losses from the drop in BUA FOODS's long position.
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The idea behind INDUSTRIAL MEDICAL GASES and BUA FOODS PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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