Correlation Between Ingles Markets and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Ingles Markets 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 Ingles Markets and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingles Markets Incorporated and Dairy Farm International, you can compare the effects of market volatilities on Ingles Markets 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 Ingles Markets with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingles Markets and Dairy Farm.
Diversification Opportunities for Ingles Markets and Dairy Farm
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ingles and Dairy is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated 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 Ingles Markets 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 Ingles Markets Incorporated 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 Ingles Markets i.e., Ingles Markets and Dairy Farm go up and down completely randomly.
Pair Corralation between Ingles Markets and Dairy Farm
Assuming the 90 days horizon Ingles Markets Incorporated is expected to under-perform the Dairy Farm. But the stock apears to be less risky and, when comparing its historical volatility, Ingles Markets Incorporated is 1.43 times less risky than Dairy Farm. The stock trades about -0.03 of its potential returns per unit of risk. The Dairy Farm International is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,086 in Dairy Farm International on September 12, 2024 and sell it today you would earn a total of 167.00 from holding Dairy Farm International or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ingles Markets Incorporated vs. Dairy Farm International
Performance |
| Timeline |
| Ingles Markets |
| Dairy Farm International |
Ingles Markets and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingles Markets and Dairy Farm
The main advantage of trading using opposite Ingles Markets and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingles Markets 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.| Ingles Markets vs. Weis Markets | Ingles Markets vs. Natural Grocers by | Ingles Markets vs. Sendas Distribuidora SA | Ingles Markets vs. Grocery Outlet Holding |
| Dairy Farm vs. Natural Grocers by | Dairy Farm vs. Grocery Outlet Holding | Dairy Farm vs. Village Super Market | Dairy Farm vs. Ingles Markets Incorporated |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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