Correlation Between Retail Food and COG Financial
Can any of the company-specific risk be diversified away by investing in both Retail Food and COG Financial 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 COG Financial 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 COG Financial Services, you can compare the effects of market volatilities on Retail Food and COG Financial 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 COG Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and COG Financial.
Diversification Opportunities for Retail Food and COG Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and COG is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and COG Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COG Financial Services 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 COG Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COG Financial Services has no effect on the direction of Retail Food i.e., Retail Food and COG Financial go up and down completely randomly.
Pair Corralation between Retail Food and COG Financial
Assuming the 90 days trading horizon Retail Food Group is expected to under-perform the COG Financial. In addition to that, Retail Food is 1.39 times more volatile than COG Financial Services. It trades about -0.25 of its total potential returns per unit of risk. COG Financial Services is currently generating about 0.3 per unit of volatility. If you would invest 89.00 in COG Financial Services on October 12, 2024 and sell it today you would earn a total of 12.00 from holding COG Financial Services or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Food Group vs. COG Financial Services
Performance |
| Timeline |
| Retail Food Group |
| COG Financial Services |
Retail Food and COG Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and COG Financial
The main advantage of trading using opposite Retail Food and COG Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, COG Financial 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 COG Financial will offset losses from the drop in COG Financial's long position.| Retail Food vs. Aussie Broadband | Retail Food vs. Torque Metals | Retail Food vs. Charter Hall Retail | Retail Food vs. Centaurus Metals |
| COG Financial vs. DY6 Metals | COG Financial vs. Perseus Mining | COG Financial vs. Retail Food Group | COG Financial vs. Aurelia Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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