Correlation Between RETAIL FOOD and PT Global
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and PT Global 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 RETAIL FOOD and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RETAIL FOOD GROUP and PT Global Mediacom, you can compare the effects of market volatilities on RETAIL FOOD and PT Global 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 RETAIL FOOD with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and PT Global.
Diversification Opportunities for RETAIL FOOD and PT Global
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RETAIL and 06L is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and RETAIL 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 RETAIL FOOD GROUP are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and PT Global go up and down completely randomly.
Pair Corralation between RETAIL FOOD and PT Global
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 0.85 times more return on investment than PT Global. However, RETAIL FOOD GROUP is 1.18 times less risky than PT Global. It trades about 0.09 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.03 per unit of risk. If you would invest 3.80 in RETAIL FOOD GROUP on August 29, 2024 and sell it today you would earn a total of 0.40 from holding RETAIL FOOD GROUP or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. PT Global Mediacom
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| PT Global Mediacom |
RETAIL FOOD and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and PT Global
The main advantage of trading using opposite RETAIL FOOD and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| PT Global vs. Highlight Communications AG | PT Global vs. INTERSHOP Communications Aktiengesellschaft | PT Global vs. RETAIL FOOD GROUP | PT Global vs. MTI WIRELESS EDGE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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