Correlation Between Seven I and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Seven I and Dairy Farm 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 Seven I and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven i Holdings and Dairy Farm International, you can compare the effects of market volatilities on Seven I and Dairy Farm 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 Seven I with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Dairy Farm.
Diversification Opportunities for Seven I and Dairy Farm
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seven and Dairy is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and Seven I 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 Seven i Holdings are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Seven I i.e., Seven I and Dairy Farm go up and down completely randomly.
Pair Corralation between Seven I and Dairy Farm
Assuming the 90 days horizon Seven i Holdings is expected to generate 1.56 times more return on investment than Dairy Farm. However, Seven I is 1.56 times more volatile than Dairy Farm International. It trades about 0.38 of its potential returns per unit of risk. Dairy Farm International is currently generating about 0.17 per unit of risk. If you would invest 1,300 in Seven i Holdings on September 4, 2024 and sell it today you would earn a total of 318.00 from holding Seven i Holdings or generate 24.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven i Holdings vs. Dairy Farm International
Performance |
| Timeline |
| Seven i Holdings |
| Dairy Farm International |
Seven I and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and Dairy Farm
The main advantage of trading using opposite Seven I and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Seven I vs. PUBLIC STORAGE PRFO | Seven I vs. National Beverage Corp | Seven I vs. DICKER DATA LTD | Seven I vs. Fidelity National Information |
| Dairy Farm vs. Seven i Holdings | Dairy Farm vs. AHOLD DELHAIADR16 EO 25 | Dairy Farm vs. Loblaw Companies Limited | Dairy Farm vs. TESCO PLC LS 0633333 |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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