Correlation Between RETAIL FOOD and Globe Trade
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and Globe Trade 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 Globe Trade 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 Globe Trade Centre, you can compare the effects of market volatilities on RETAIL FOOD and Globe Trade 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 Globe Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Globe Trade.
Diversification Opportunities for RETAIL FOOD and Globe Trade
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RETAIL and Globe is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Globe Trade Centre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Trade Centre 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 Globe Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Trade Centre has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Globe Trade go up and down completely randomly.
Pair Corralation between RETAIL FOOD and Globe Trade
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 12.1 times more return on investment than Globe Trade. However, RETAIL FOOD is 12.1 times more volatile than Globe Trade Centre. It trades about 0.24 of its potential returns per unit of risk. Globe Trade Centre is currently generating about -0.21 per unit of risk. If you would invest 3.70 in RETAIL FOOD GROUP on August 29, 2024 and sell it today you would earn a total of 0.50 from holding RETAIL FOOD GROUP or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. Globe Trade Centre
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| Globe Trade Centre |
RETAIL FOOD and Globe Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and Globe Trade
The main advantage of trading using opposite RETAIL FOOD and Globe Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, Globe Trade 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 Globe Trade will offset losses from the drop in Globe Trade's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| Globe Trade vs. Corporate Office Properties | Globe Trade vs. TSOGO SUN GAMING | Globe Trade vs. DFS Furniture PLC | Globe Trade vs. FUTURE GAMING GRP |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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