Correlation Between PATTIES FOODS and Consolidated Edison
Can any of the company-specific risk be diversified away by investing in both PATTIES FOODS and Consolidated Edison 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 PATTIES FOODS and Consolidated Edison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PATTIES FOODS and Consolidated Edison, you can compare the effects of market volatilities on PATTIES FOODS and Consolidated Edison 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 PATTIES FOODS with a short position of Consolidated Edison. Check out your portfolio center. Please also check ongoing floating volatility patterns of PATTIES FOODS and Consolidated Edison.
Diversification Opportunities for PATTIES FOODS and Consolidated Edison
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PATTIES and Consolidated is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PATTIES FOODS and Consolidated Edison in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Edison and PATTIES 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 PATTIES FOODS are associated (or correlated) with Consolidated Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Edison has no effect on the direction of PATTIES FOODS i.e., PATTIES FOODS and Consolidated Edison go up and down completely randomly.
Pair Corralation between PATTIES FOODS and Consolidated Edison
Assuming the 90 days horizon PATTIES FOODS is expected to generate 4.71 times more return on investment than Consolidated Edison. However, PATTIES FOODS is 4.71 times more volatile than Consolidated Edison. It trades about 0.14 of its potential returns per unit of risk. Consolidated Edison is currently generating about -0.02 per unit of risk. If you would invest 16.00 in PATTIES FOODS on October 24, 2024 and sell it today you would earn a total of 12.00 from holding PATTIES FOODS or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.78% |
| Values | Daily Returns |
PATTIES FOODS vs. Consolidated Edison
Performance |
| Timeline |
| PATTIES FOODS |
| Consolidated Edison |
PATTIES FOODS and Consolidated Edison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PATTIES FOODS and Consolidated Edison
The main advantage of trading using opposite PATTIES FOODS and Consolidated Edison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PATTIES FOODS position performs unexpectedly, Consolidated Edison 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 Consolidated Edison will offset losses from the drop in Consolidated Edison's long position.| PATTIES FOODS vs. Zoetis Inc | PATTIES FOODS vs. Takeda Pharmaceutical | PATTIES FOODS vs. Eisai Co | PATTIES FOODS vs. Shionogi Co |
| Consolidated Edison vs. MOLSON RS BEVERAGE | Consolidated Edison vs. Fortescue Metals Group | Consolidated Edison vs. Forsys Metals Corp | Consolidated Edison vs. PATTIES FOODS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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