Correlation Between Sodexo PK and RB Global
Can any of the company-specific risk be diversified away by investing in both Sodexo PK and RB Global 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 Sodexo PK and RB Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sodexo PK and RB Global, you can compare the effects of market volatilities on Sodexo PK and RB Global 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 Sodexo PK with a short position of RB Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodexo PK and RB Global.
Diversification Opportunities for Sodexo PK and RB Global
Very weak diversification
The 3 months correlation between Sodexo and RBA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo PK and RB Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB Global and Sodexo PK 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 Sodexo PK are associated (or correlated) with RB Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB Global has no effect on the direction of Sodexo PK i.e., Sodexo PK and RB Global go up and down completely randomly.
Pair Corralation between Sodexo PK and RB Global
Assuming the 90 days horizon Sodexo PK is expected to generate 2.08 times less return on investment than RB Global. But when comparing it to its historical volatility, Sodexo PK is 1.18 times less risky than RB Global. It trades about 0.05 of its potential returns per unit of risk. RB Global is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,493 in RB Global on August 25, 2024 and sell it today you would earn a total of 4,270 from holding RB Global or generate 77.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sodexo PK vs. RB Global
Performance |
| Timeline |
| Sodexo PK |
| RB Global |
Sodexo PK and RB Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sodexo PK and RB Global
The main advantage of trading using opposite Sodexo PK and RB Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodexo PK position performs unexpectedly, RB Global 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 RB Global will offset losses from the drop in RB Global's long position.| Sodexo PK vs. FitLife Brands, Common | Sodexo PK vs. HUMANA INC | Sodexo PK vs. SCOR PK | Sodexo PK vs. Aquagold International |
| RB Global vs. First Advantage Corp | RB Global vs. Civeo Corp | RB Global vs. Performant Financial | RB Global vs. Network 1 Technologies |
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 Stocks Directory module to find actively traded stocks across global markets.
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