Correlation Between Retail Food and Garda Diversified
Can any of the company-specific risk be diversified away by investing in both Retail Food and Garda Diversified 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 Garda Diversified 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 Garda Diversified Ppty, you can compare the effects of market volatilities on Retail Food and Garda Diversified 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 Garda Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Garda Diversified.
Diversification Opportunities for Retail Food and Garda Diversified
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retail and Garda is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and Garda Diversified Ppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garda Diversified Ppty 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 Garda Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garda Diversified Ppty has no effect on the direction of Retail Food i.e., Retail Food and Garda Diversified go up and down completely randomly.
Pair Corralation between Retail Food and Garda Diversified
Assuming the 90 days trading horizon Retail Food Group is expected to under-perform the Garda Diversified. In addition to that, Retail Food is 2.11 times more volatile than Garda Diversified Ppty. It trades about -0.3 of its total potential returns per unit of risk. Garda Diversified Ppty is currently generating about -0.18 per unit of volatility. If you would invest 118.00 in Garda Diversified Ppty on November 4, 2024 and sell it today you would lose (5.00) from holding Garda Diversified Ppty or give up 4.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Food Group vs. Garda Diversified Ppty
Performance |
| Timeline |
| Retail Food Group |
| Garda Diversified Ppty |
Retail Food and Garda Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and Garda Diversified
The main advantage of trading using opposite Retail Food and Garda Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, Garda Diversified 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 Garda Diversified will offset losses from the drop in Garda Diversified's long position.| Retail Food vs. Aussie Broadband | Retail Food vs. A1 Investments Resources | Retail Food vs. Navigator Global Investments | Retail Food vs. Hotel Property Investments |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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