Correlation Between Pure Foods and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both Pure Foods and Whitehaven Coal 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 Pure Foods and Whitehaven Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Foods Tasmania and Whitehaven Coal, you can compare the effects of market volatilities on Pure Foods and Whitehaven Coal 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 Pure Foods with a short position of Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Foods and Whitehaven Coal.
Diversification Opportunities for Pure Foods and Whitehaven Coal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pure and Whitehaven is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pure Foods Tasmania and Whitehaven Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal and Pure 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 Pure Foods Tasmania are associated (or correlated) with Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of Pure Foods i.e., Pure Foods and Whitehaven Coal go up and down completely randomly.
Pair Corralation between Pure Foods and Whitehaven Coal
If you would invest 2.10 in Pure Foods Tasmania on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Pure Foods Tasmania or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pure Foods Tasmania vs. Whitehaven Coal
Performance |
| Timeline |
| Pure Foods Tasmania |
| Whitehaven Coal |
Pure Foods and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Foods and Whitehaven Coal
The main advantage of trading using opposite Pure Foods and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Foods position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| Pure Foods vs. A1 Investments Resources | Pure Foods vs. K2 Asset Management | Pure Foods vs. Actinogen Medical | Pure Foods vs. Australian Unity Office |
| Whitehaven Coal vs. MetalsGrove Mining | Whitehaven Coal vs. Sayona Mining | Whitehaven Coal vs. K2 Asset Management | Whitehaven Coal vs. Diversified United Investment |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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