Correlation Between RETAIL FOOD and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and Stanley Electric 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 Stanley Electric 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 Stanley Electric Co, you can compare the effects of market volatilities on RETAIL FOOD and Stanley Electric 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 Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Stanley Electric.
Diversification Opportunities for RETAIL FOOD and Stanley Electric
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RETAIL and Stanley is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric 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 Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Stanley Electric go up and down completely randomly.
Pair Corralation between RETAIL FOOD and Stanley Electric
Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Stanley Electric. But the stock apears to be less risky and, when comparing its historical volatility, RETAIL FOOD GROUP is 1.31 times less risky than Stanley Electric. The stock trades about -0.35 of its potential returns per unit of risk. The Stanley Electric Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,530 in Stanley Electric Co on September 21, 2024 and sell it today you would earn a total of 20.00 from holding Stanley Electric Co or generate 1.31% 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. Stanley Electric Co
Performance |
| Timeline |
| RETAIL FOOD GROUP |
| Stanley Electric |
RETAIL FOOD and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RETAIL FOOD and Stanley Electric
The main advantage of trading using opposite RETAIL FOOD and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
| Stanley Electric vs. FUYO GENERAL LEASE | Stanley Electric vs. RETAIL FOOD GROUP | Stanley Electric vs. PICKN PAY STORES | Stanley Electric vs. United Rentals |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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