Correlation Between Seven I and Woolworths Group
Can any of the company-specific risk be diversified away by investing in both Seven I and Woolworths Group 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 Woolworths Group 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 Woolworths Group Limited, you can compare the effects of market volatilities on Seven I and Woolworths Group 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 Woolworths Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Woolworths Group.
Diversification Opportunities for Seven I and Woolworths Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Seven and Woolworths is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Woolworths Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woolworths 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 Woolworths Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woolworths Group has no effect on the direction of Seven I i.e., Seven I and Woolworths Group go up and down completely randomly.
Pair Corralation between Seven I and Woolworths Group
If you would invest (100.00) in Woolworths Group Limited on November 2, 2024 and sell it today you would earn a total of 100.00 from holding Woolworths Group Limited or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven i Holdings vs. Woolworths Group Limited
Performance |
| Timeline |
| Seven i Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Woolworths Group |
Seven I and Woolworths Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and Woolworths Group
The main advantage of trading using opposite Seven I and Woolworths Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I position performs unexpectedly, Woolworths Group 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 Woolworths Group will offset losses from the drop in Woolworths Group's long position.| Seven I vs. Easy Software AG | Seven I vs. Check Point Software | Seven I vs. OPERA SOFTWARE | Seven I vs. PKSHA TECHNOLOGY INC |
| Woolworths Group vs. UNIQA INSURANCE GR | Woolworths Group vs. Direct Line Insurance | Woolworths Group vs. Insurance Australia Group | Woolworths Group vs. Canadian Utilities Limited |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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