Correlation Between RB Food and Prodigy Public
Can any of the company-specific risk be diversified away by investing in both RB Food and Prodigy Public 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 RB Food and Prodigy Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RB Food Supply and Prodigy Public, you can compare the effects of market volatilities on RB Food and Prodigy Public 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 RB Food with a short position of Prodigy Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of RB Food and Prodigy Public.
Diversification Opportunities for RB Food and Prodigy Public
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RBF and Prodigy is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding RB Food Supply and Prodigy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Public and RB Food 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 RB Food Supply are associated (or correlated) with Prodigy Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Public has no effect on the direction of RB Food i.e., RB Food and Prodigy Public go up and down completely randomly.
Pair Corralation between RB Food and Prodigy Public
Assuming the 90 days trading horizon RB Food Supply is expected to generate 3.51 times more return on investment than Prodigy Public. However, RB Food is 3.51 times more volatile than Prodigy Public. It trades about 0.21 of its potential returns per unit of risk. Prodigy Public is currently generating about -0.08 per unit of risk. If you would invest 565.00 in RB Food Supply on September 15, 2024 and sell it today you would earn a total of 75.00 from holding RB Food Supply or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RB Food Supply vs. Prodigy Public
Performance |
| Timeline |
| RB Food Supply |
| Prodigy Public |
RB Food and Prodigy Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RB Food and Prodigy Public
The main advantage of trading using opposite RB Food and Prodigy Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RB Food position performs unexpectedly, Prodigy Public 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 Prodigy Public will offset losses from the drop in Prodigy Public's long position.| RB Food vs. Thai Union Group | RB Food vs. Thai Union Group | RB Food vs. Thai President Foods | RB Food vs. Thai Vegetable Oil |
| Prodigy Public vs. Bangkok Sheet Metal | Prodigy Public vs. Porn Prom Metal | Prodigy Public vs. 2S Metal Public | Prodigy Public vs. Mena Transport Public |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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