Correlation Between Real Good and Turning Point
Can any of the company-specific risk be diversified away by investing in both Real Good and Turning Point 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 Real Good and Turning Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Good Food and Turning Point Brands, you can compare the effects of market volatilities on Real Good and Turning Point 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 Real Good with a short position of Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Good and Turning Point.
Diversification Opportunities for Real Good and Turning Point
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Real and Turning is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Real Good Food and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands and Real Good 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 Real Good Food are associated (or correlated) with Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Real Good i.e., Real Good and Turning Point go up and down completely randomly.
Pair Corralation between Real Good and Turning Point
Considering the 90-day investment horizon Real Good Food is expected to generate 34.08 times more return on investment than Turning Point. However, Real Good is 34.08 times more volatile than Turning Point Brands. It trades about 0.06 of its potential returns per unit of risk. Turning Point Brands is currently generating about 0.21 per unit of risk. If you would invest 376.00 in Real Good Food on November 1, 2024 and sell it today you would lose (361.00) from holding Real Good Food or give up 96.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 86.67% |
| Values | Daily Returns |
Real Good Food vs. Turning Point Brands
Performance |
| Timeline |
| Real Good Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Turning Point Brands |
Real Good and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Good and Turning Point
The main advantage of trading using opposite Real Good and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Good position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point's long position.| Real Good vs. Seneca Foods Corp | Real Good vs. Central Garden Pet | Real Good vs. Central Garden Pet | Real Good vs. Natures Sunshine Products |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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