Correlation Between Multi Retail and Victory Supermarket
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Victory Supermarket 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 Multi Retail and Victory Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Victory Supermarket Chain, you can compare the effects of market volatilities on Multi Retail and Victory Supermarket 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 Multi Retail with a short position of Victory Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Victory Supermarket.
Diversification Opportunities for Multi Retail and Victory Supermarket
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Multi and Victory is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain and Multi Retail 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 Multi Retail Group are associated (or correlated) with Victory Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of Multi Retail i.e., Multi Retail and Victory Supermarket go up and down completely randomly.
Pair Corralation between Multi Retail and Victory Supermarket
Assuming the 90 days trading horizon Multi Retail is expected to generate 1.33 times less return on investment than Victory Supermarket. In addition to that, Multi Retail is 1.47 times more volatile than Victory Supermarket Chain. It trades about 0.14 of its total potential returns per unit of risk. Victory Supermarket Chain is currently generating about 0.27 per unit of volatility. If you would invest 495,100 in Victory Supermarket Chain on August 29, 2024 and sell it today you would earn a total of 45,000 from holding Victory Supermarket Chain or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Victory Supermarket Chain
Performance |
| Timeline |
| Multi Retail Group |
| Victory Supermarket Chain |
Multi Retail and Victory Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Victory Supermarket
The main advantage of trading using opposite Multi Retail and Victory Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Victory Supermarket 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 Victory Supermarket will offset losses from the drop in Victory Supermarket's long position.| Multi Retail vs. Brainsway | Multi Retail vs. Mivne Real Estate | Multi Retail vs. Photomyne | Multi Retail vs. Bezeq Israeli Telecommunication |
| Victory Supermarket vs. Shufersal | Victory Supermarket vs. Rami Levi | Victory Supermarket vs. Tiv Taam | Victory Supermarket vs. M Yochananof and |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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