Correlation Between Retail Food and Viva Leisure
Can any of the company-specific risk be diversified away by investing in both Retail Food and Viva Leisure 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 Viva Leisure 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 Viva Leisure, you can compare the effects of market volatilities on Retail Food and Viva Leisure 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 Viva Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Viva Leisure.
Diversification Opportunities for Retail Food and Viva Leisure
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Retail and Viva is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Retail Food Group and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Retail Food i.e., Retail Food and Viva Leisure go up and down completely randomly.
Pair Corralation between Retail Food and Viva Leisure
Assuming the 90 days trading horizon Retail Food Group is expected to generate 1.16 times more return on investment than Viva Leisure. However, Retail Food is 1.16 times more volatile than Viva Leisure. It trades about 0.15 of its potential returns per unit of risk. Viva Leisure is currently generating about 0.05 per unit of risk. If you would invest 6.60 in Retail Food Group on August 25, 2024 and sell it today you would earn a total of 0.60 from holding Retail Food Group or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Retail Food Group vs. Viva Leisure
Performance |
| Timeline |
| Retail Food Group |
| Viva Leisure |
Retail Food and Viva Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Food and Viva Leisure
The main advantage of trading using opposite Retail Food and Viva Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Food position performs unexpectedly, Viva Leisure 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 Viva Leisure will offset losses from the drop in Viva Leisure's long position.| Retail Food vs. Pioneer Credit | Retail Food vs. Beston Global Food | Retail Food vs. Actinogen Medical | Retail Food vs. Prime Financial Group |
| Viva Leisure vs. Richmond Vanadium Technology | Viva Leisure vs. Dexus Convenience Retail | Viva Leisure vs. Retail Food Group | Viva Leisure vs. Janison Education Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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