Correlation Between RETAIL FOOD and TINC Comm
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and TINC Comm 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 TINC Comm 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 TINC Comm VA, you can compare the effects of market volatilities on RETAIL FOOD and TINC Comm 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 TINC Comm. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and TINC Comm.
Diversification Opportunities for RETAIL FOOD and TINC Comm
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RETAIL and TINC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and TINC Comm VA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TINC Comm VA 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 TINC Comm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TINC Comm VA has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and TINC Comm go up and down completely randomly.
Pair Corralation between RETAIL FOOD and TINC Comm
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 1.99 times more return on investment than TINC Comm. However, RETAIL FOOD is 1.99 times more volatile than TINC Comm VA. It trades about 0.05 of its potential returns per unit of risk. TINC Comm VA is currently generating about -0.06 per unit of risk. If you would invest 4.00 in RETAIL FOOD GROUP on September 3, 2024 and sell it today you would earn a total of 0.20 from holding RETAIL FOOD GROUP or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. TINC Comm VA
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| TINC Comm VA |
RETAIL FOOD and TINC Comm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and TINC Comm
The main advantage of trading using opposite RETAIL FOOD and TINC Comm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, TINC Comm 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 TINC Comm will offset losses from the drop in TINC Comm's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| TINC Comm vs. Costco Wholesale Corp | TINC Comm vs. RETAIL FOOD GROUP | TINC Comm vs. National Retail Properties | TINC Comm vs. QURATE RETAIL INC |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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