Correlation Between RETAIL FOOD and SAFETY MEDICAL
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and SAFETY MEDICAL 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 SAFETY MEDICAL 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 SAFETY MEDICAL PROD, you can compare the effects of market volatilities on RETAIL FOOD and SAFETY MEDICAL 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 SAFETY MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and SAFETY MEDICAL.
Diversification Opportunities for RETAIL FOOD and SAFETY MEDICAL
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RETAIL and SAFETY is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and SAFETY MEDICAL PROD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFETY MEDICAL PROD 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 SAFETY MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFETY MEDICAL PROD has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and SAFETY MEDICAL go up and down completely randomly.
Pair Corralation between RETAIL FOOD and SAFETY MEDICAL
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to generate 0.94 times more return on investment than SAFETY MEDICAL. However, RETAIL FOOD GROUP is 1.07 times less risky than SAFETY MEDICAL. It trades about 0.0 of its potential returns per unit of risk. SAFETY MEDICAL PROD is currently generating about -0.02 per unit of risk. If you would invest 184.00 in RETAIL FOOD GROUP on September 19, 2024 and sell it today you would lose (28.00) from holding RETAIL FOOD GROUP or give up 15.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
RETAIL FOOD GROUP vs. SAFETY MEDICAL PROD
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| SAFETY MEDICAL PROD |
RETAIL FOOD and SAFETY MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and SAFETY MEDICAL
The main advantage of trading using opposite RETAIL FOOD and SAFETY MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, SAFETY MEDICAL 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 SAFETY MEDICAL will offset losses from the drop in SAFETY MEDICAL's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| SAFETY MEDICAL vs. ADRIATIC METALS LS 013355 | SAFETY MEDICAL vs. Zijin Mining Group | SAFETY MEDICAL vs. Perseus Mining Limited | SAFETY MEDICAL vs. RETAIL FOOD GROUP |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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