Correlation Between Seven I and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both Seven I and RETAIL FOOD 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 RETAIL FOOD 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 RETAIL FOOD GROUP, you can compare the effects of market volatilities on Seven I and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and RETAIL FOOD.
Diversification Opportunities for Seven I and RETAIL FOOD
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seven and RETAIL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of Seven I i.e., Seven I and RETAIL FOOD go up and down completely randomly.
Pair Corralation between Seven I and RETAIL FOOD
Assuming the 90 days horizon Seven i Holdings is expected to generate 1.14 times more return on investment than RETAIL FOOD. However, Seven I is 1.14 times more volatile than RETAIL FOOD GROUP. It trades about 0.12 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about 0.02 per unit of risk. If you would invest 1,396 in Seven i Holdings on September 12, 2024 and sell it today you would earn a total of 214.00 from holding Seven i Holdings or generate 15.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven i Holdings vs. RETAIL FOOD GROUP
Performance |
| Timeline |
| Seven i Holdings |
| RETAIL FOOD GROUP |
Seven I and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and RETAIL FOOD
The main advantage of trading using opposite Seven I and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| Seven I vs. China BlueChemical | Seven I vs. Siamgas And Petrochemicals | Seven I vs. Cardinal Health | Seven I vs. SHIP HEALTHCARE HLDGINC |
| RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc | RETAIL FOOD vs. Apple Inc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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