Correlation Between Retail Food and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both Retail Food and AiMedia Technologies 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 Retail Food and AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Food Group and AiMedia Technologies, you can compare the effects of market volatilities on Retail Food and AiMedia Technologies 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 Retail Food with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and AiMedia Technologies.
Diversification Opportunities for Retail Food and AiMedia Technologies
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Retail and AiMedia is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies and Retail 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 Retail Food Group are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of Retail Food i.e., Retail Food and AiMedia Technologies go up and down completely randomly.
Pair Corralation between Retail Food and AiMedia Technologies
Assuming the 90 days trading horizon Retail Food Group is expected to generate 0.49 times more return on investment than AiMedia Technologies. However, Retail Food Group is 2.06 times less risky than AiMedia Technologies. It trades about -0.31 of its potential returns per unit of risk. AiMedia Technologies is currently generating about -0.28 per unit of risk. If you would invest 240.00 in Retail Food Group on November 9, 2024 and sell it today you would lose (34.00) from holding Retail Food Group or give up 14.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Food Group vs. AiMedia Technologies
Performance |
| Timeline |
| Retail Food Group |
| AiMedia Technologies |
Retail Food and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and AiMedia Technologies
The main advantage of trading using opposite Retail Food and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| Retail Food vs. Australian Strategic Materials | Retail Food vs. Liberty Financial Group | Retail Food vs. Legacy Iron Ore | Retail Food vs. Auswide Bank |
| AiMedia Technologies vs. Event Hospitality and | AiMedia Technologies vs. Data3 | AiMedia Technologies vs. Apiam Animal Health | AiMedia Technologies vs. Flagship Investments |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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