Correlation Between Innovative Food and Colabor
Can any of the company-specific risk be diversified away by investing in both Innovative Food and Colabor 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 Innovative Food and Colabor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovative Food Hldg and Colabor Group, you can compare the effects of market volatilities on Innovative Food and Colabor 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 Innovative Food with a short position of Colabor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Food and Colabor.
Diversification Opportunities for Innovative Food and Colabor
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innovative and Colabor is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Food Hldg and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group and Innovative Food 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 Innovative Food Hldg are associated (or correlated) with Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of Innovative Food i.e., Innovative Food and Colabor go up and down completely randomly.
Pair Corralation between Innovative Food and Colabor
Given the investment horizon of 90 days Innovative Food Hldg is expected to generate 2.23 times more return on investment than Colabor. However, Innovative Food is 2.23 times more volatile than Colabor Group. It trades about 0.26 of its potential returns per unit of risk. Colabor Group is currently generating about -0.31 per unit of risk. If you would invest 178.00 in Innovative Food Hldg on October 23, 2024 and sell it today you would earn a total of 21.00 from holding Innovative Food Hldg or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Food Hldg vs. Colabor Group
Performance |
| Timeline |
| Innovative Food Hldg |
| Colabor Group |
Innovative Food and Colabor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Food and Colabor
The main advantage of trading using opposite Innovative Food and Colabor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Food position performs unexpectedly, Colabor 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 Colabor will offset losses from the drop in Colabor's long position.| Innovative Food vs. Organto Foods | Innovative Food vs. Colabor Group | Innovative Food vs. Bunzl plc | Innovative Food vs. Hf Foods Group |
| Colabor vs. Mission Produce | Colabor vs. The Andersons | Colabor vs. Bunzl plc | Colabor vs. Innovative Food Hldg |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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