Correlation Between Roebuck Food and European Metals
Can any of the company-specific risk be diversified away by investing in both Roebuck Food and European Metals 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 Roebuck Food and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and European Metals Holdings, you can compare the effects of market volatilities on Roebuck Food and European Metals 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 Roebuck Food with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and European Metals.
Diversification Opportunities for Roebuck Food and European Metals
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Roebuck and European is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and Roebuck 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 Roebuck Food Group are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Roebuck Food i.e., Roebuck Food and European Metals go up and down completely randomly.
Pair Corralation between Roebuck Food and European Metals
Assuming the 90 days trading horizon Roebuck Food is expected to generate 4.18 times less return on investment than European Metals. But when comparing it to its historical volatility, Roebuck Food Group is 3.81 times less risky than European Metals. It trades about 0.27 of its potential returns per unit of risk. European Metals Holdings is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 700.00 in European Metals Holdings on October 16, 2024 and sell it today you would earn a total of 125.00 from holding European Metals Holdings or generate 17.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roebuck Food Group vs. European Metals Holdings
Performance |
| Timeline |
| Roebuck Food Group |
| European Metals Holdings |
Roebuck Food and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and European Metals
The main advantage of trading using opposite Roebuck Food and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.| Roebuck Food vs. Sovereign Metals | Roebuck Food vs. Cornish Metals | Roebuck Food vs. International Biotechnology Trust | Roebuck Food vs. Power Metal Resources |
| European Metals vs. Premier Foods PLC | European Metals vs. Roebuck Food Group | European Metals vs. Symphony Environmental Technologies | European Metals vs. Associated British Foods |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |