Correlation Between RETAIL FOOD and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and ITALIAN WINE 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 ITALIAN WINE 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 ITALIAN WINE BRANDS, you can compare the effects of market volatilities on RETAIL FOOD and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and ITALIAN WINE.
Diversification Opportunities for RETAIL FOOD and ITALIAN WINE
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between RETAIL and ITALIAN is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and ITALIAN WINE go up and down completely randomly.
Pair Corralation between RETAIL FOOD and ITALIAN WINE
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 1.74 times more return on investment than ITALIAN WINE. However, RETAIL FOOD is 1.74 times more volatile than ITALIAN WINE BRANDS. It trades about 0.2 of its potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about -0.07 per unit of risk. If you would invest 3.80 in RETAIL FOOD GROUP on September 3, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| ITALIAN WINE BRANDS |
RETAIL FOOD and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and ITALIAN WINE
The main advantage of trading using opposite RETAIL FOOD and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| ITALIAN WINE vs. CHINA TONTINE WINES | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |