Correlation Between Matco Foods and National Foods
Can any of the company-specific risk be diversified away by investing in both Matco Foods and National Foods 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 Matco Foods and National Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matco Foods and National Foods, you can compare the effects of market volatilities on Matco Foods and National Foods 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 Matco Foods with a short position of National Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matco Foods and National Foods.
Diversification Opportunities for Matco Foods and National Foods
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Matco and National is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Matco Foods and National Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Foods and Matco Foods 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 Matco Foods are associated (or correlated) with National Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Foods has no effect on the direction of Matco Foods i.e., Matco Foods and National Foods go up and down completely randomly.
Pair Corralation between Matco Foods and National Foods
Assuming the 90 days trading horizon Matco Foods is expected to generate 1.45 times more return on investment than National Foods. However, Matco Foods is 1.45 times more volatile than National Foods. It trades about 0.06 of its potential returns per unit of risk. National Foods is currently generating about 0.08 per unit of risk. If you would invest 2,938 in Matco Foods on November 19, 2024 and sell it today you would earn a total of 2,298 from holding Matco Foods or generate 78.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.89% |
| Values | Daily Returns |
Matco Foods vs. National Foods
Performance |
| Timeline |
| Matco Foods |
| National Foods |
Matco Foods and National Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matco Foods and National Foods
The main advantage of trading using opposite Matco Foods and National Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matco Foods position performs unexpectedly, National Foods 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 National Foods will offset losses from the drop in National Foods' long position.| Matco Foods vs. TPL Insurance | Matco Foods vs. Unity Foods | Matco Foods vs. National Bank of | Matco Foods vs. Universal Insurance |
| National Foods vs. Air Link Communication | National Foods vs. National Bank of | National Foods vs. Shaheen Insurance | National Foods vs. 786 Investment Limited |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |