Correlation Between Retail Food and FSA
Can any of the company-specific risk be diversified away by investing in both Retail Food and FSA 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 FSA 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 FSA Group, you can compare the effects of market volatilities on Retail Food and FSA 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 FSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and FSA.
Diversification Opportunities for Retail Food and FSA
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and FSA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group 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 FSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Retail Food i.e., Retail Food and FSA go up and down completely randomly.
Pair Corralation between Retail Food and FSA
Assuming the 90 days trading horizon Retail Food Group is expected to under-perform the FSA. In addition to that, Retail Food is 2.06 times more volatile than FSA Group. It trades about -0.34 of its total potential returns per unit of risk. FSA Group is currently generating about 0.25 per unit of volatility. If you would invest 80.00 in FSA Group on November 3, 2024 and sell it today you would earn a total of 5.00 from holding FSA Group or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Food Group vs. FSA Group
Performance |
| Timeline |
| Retail Food Group |
| FSA Group |
Retail Food and FSA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and FSA
The main advantage of trading using opposite Retail Food and FSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, FSA 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 FSA will offset losses from the drop in FSA's long position.| Retail Food vs. Computershare | Retail Food vs. Meeka Metals Limited | Retail Food vs. Hammer Metals | Retail Food vs. ABACUS STORAGE KING |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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