Correlation Between Roebuck Food and Shell Plc
Can any of the company-specific risk be diversified away by investing in both Roebuck Food and Shell Plc 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 Shell Plc 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 Shell plc, you can compare the effects of market volatilities on Roebuck Food and Shell Plc 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 Shell Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and Shell Plc.
Diversification Opportunities for Roebuck Food and Shell Plc
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Roebuck and Shell is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and Shell plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell plc 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 Shell Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell plc has no effect on the direction of Roebuck Food i.e., Roebuck Food and Shell Plc go up and down completely randomly.
Pair Corralation between Roebuck Food and Shell Plc
Assuming the 90 days trading horizon Roebuck Food Group is expected to generate 1.59 times more return on investment than Shell Plc. However, Roebuck Food is 1.59 times more volatile than Shell plc. It trades about 0.04 of its potential returns per unit of risk. Shell plc is currently generating about 0.02 per unit of risk. If you would invest 1,300 in Roebuck Food Group on August 24, 2024 and sell it today you would earn a total of 380.00 from holding Roebuck Food Group or generate 29.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Roebuck Food Group vs. Shell plc
Performance |
| Timeline |
| Roebuck Food Group |
| Shell plc |
Roebuck Food and Shell Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and Shell Plc
The main advantage of trading using opposite Roebuck Food and Shell Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food position performs unexpectedly, Shell Plc 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 Shell Plc will offset losses from the drop in Shell Plc's long position.| Roebuck Food vs. Quadrise Plc | Roebuck Food vs. Intuitive Investments Group | Roebuck Food vs. European Metals Holdings | Roebuck Food vs. Athelney Trust plc |
| Shell Plc vs. Naked Wines plc | Shell Plc vs. GlobalData PLC | Shell Plc vs. Roebuck Food Group | Shell Plc vs. Austevoll Seafood ASA |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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