Correlation Between RETAIL FOOD and Orange SA
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and Orange SA 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 Orange SA 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 Orange SA, you can compare the effects of market volatilities on RETAIL FOOD and Orange SA 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 Orange SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Orange SA.
Diversification Opportunities for RETAIL FOOD and Orange SA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RETAIL and Orange is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Orange SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orange SA 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 Orange SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orange SA has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Orange SA go up and down completely randomly.
Pair Corralation between RETAIL FOOD and Orange SA
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 2.73 times more return on investment than Orange SA. However, RETAIL FOOD is 2.73 times more volatile than Orange SA. It trades about 0.22 of its potential returns per unit of risk. Orange SA is currently generating about 0.03 per unit of risk. If you would invest 3.70 in RETAIL FOOD GROUP on August 31, 2024 and sell it today you would earn a total of 0.45 from holding RETAIL FOOD GROUP or generate 12.16% 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. Orange SA
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| Orange SA |
RETAIL FOOD and Orange SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and Orange SA
The main advantage of trading using opposite RETAIL FOOD and Orange SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, Orange SA 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 Orange SA will offset losses from the drop in Orange SA's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| Orange SA vs. Digilife Technologies Limited | Orange SA vs. Uber Technologies | Orange SA vs. GLG LIFE TECH | Orange SA vs. MAGIC SOFTWARE ENTR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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