Correlation Between Retail Food and Aurum Resources
Can any of the company-specific risk be diversified away by investing in both Retail Food and Aurum Resources 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 Aurum Resources 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 Aurum Resources, you can compare the effects of market volatilities on Retail Food and Aurum Resources 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 Aurum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Aurum Resources.
Diversification Opportunities for Retail Food and Aurum Resources
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and Aurum is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and Aurum Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurum Resources 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 Aurum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurum Resources has no effect on the direction of Retail Food i.e., Retail Food and Aurum Resources go up and down completely randomly.
Pair Corralation between Retail Food and Aurum Resources
Assuming the 90 days trading horizon Retail Food is expected to generate 17.8 times less return on investment than Aurum Resources. But when comparing it to its historical volatility, Retail Food Group is 1.49 times less risky than Aurum Resources. It trades about 0.0 of its potential returns per unit of risk. Aurum Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Aurum Resources on September 4, 2024 and sell it today you would earn a total of 19.00 from holding Aurum Resources or generate 105.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Retail Food Group vs. Aurum Resources
Performance |
| Timeline |
| Retail Food Group |
| Aurum Resources |
Retail Food and Aurum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and Aurum Resources
The main advantage of trading using opposite Retail Food and Aurum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, Aurum Resources 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 Aurum Resources will offset losses from the drop in Aurum Resources' long position.| Retail Food vs. Aneka Tambang Tbk | Retail Food vs. BHP Group Limited | Retail Food vs. Commonwealth Bank of | Retail Food vs. Commonwealth Bank of |
| Aurum Resources vs. Talisman Mining | Aurum Resources vs. Farm Pride Foods | Aurum Resources vs. Legacy Iron Ore | Aurum Resources vs. Perseus Mining |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |