Correlation Between Natural Health and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Natural Health and Collins 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 Natural Health and Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and Collins Foods Limited, you can compare the effects of market volatilities on Natural Health and Collins 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 Natural Health with a short position of Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Collins Foods.
Diversification Opportunities for Natural Health and Collins Foods
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and Collins is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and Collins Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods Limited and Natural Health 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 Natural Health Trends are associated (or correlated) with Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods Limited has no effect on the direction of Natural Health i.e., Natural Health and Collins Foods go up and down completely randomly.
Pair Corralation between Natural Health and Collins Foods
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the Collins Foods. But the stock apears to be less risky and, when comparing its historical volatility, Natural Health Trends is 1.04 times less risky than Collins Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Collins Foods Limited is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 530.00 in Collins Foods Limited on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Collins Foods Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. Collins Foods Limited
Performance |
| Timeline |
| Natural Health Trends |
| Collins Foods Limited |
Natural Health and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Collins Foods
The main advantage of trading using opposite Natural Health and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Collins 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Natural Health vs. NURAN WIRELESS INC | Natural Health vs. YOOMA WELLNESS INC | Natural Health vs. Haverty Furniture Companies | Natural Health vs. LGI Homes |
| Collins Foods vs. Highlight Communications AG | Collins Foods vs. PRECISION DRILLING P | Collins Foods vs. International Consolidated Airlines | Collins Foods vs. Southwest Airlines Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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