Correlation Between Sligro Food and Cromwell Property
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Cromwell Property 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 Sligro Food and Cromwell Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Cromwell Property Group, you can compare the effects of market volatilities on Sligro Food and Cromwell Property 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 Sligro Food with a short position of Cromwell Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Cromwell Property.
Diversification Opportunities for Sligro Food and Cromwell Property
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sligro and Cromwell is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property and Sligro Food 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 Sligro Food Group are associated (or correlated) with Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of Sligro Food i.e., Sligro Food and Cromwell Property go up and down completely randomly.
Pair Corralation between Sligro Food and Cromwell Property
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the Cromwell Property. In addition to that, Sligro Food is 1.56 times more volatile than Cromwell Property Group. It trades about -0.06 of its total potential returns per unit of risk. Cromwell Property Group is currently generating about -0.02 per unit of volatility. If you would invest 30.00 in Cromwell Property Group on September 2, 2024 and sell it today you would lose (2.00) from holding Cromwell Property Group or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Sligro Food Group vs. Cromwell Property Group
Performance |
| Timeline |
| Sligro Food Group |
| Cromwell Property |
Sligro Food and Cromwell Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Cromwell Property
The main advantage of trading using opposite Sligro Food and Cromwell Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Cromwell Property 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 Cromwell Property will offset losses from the drop in Cromwell Property's long position.| Sligro Food vs. Legacy Education | Sligro Food vs. Apple Inc | Sligro Food vs. NVIDIA | Sligro Food vs. Microsoft |
| Cromwell Property vs. Inhibrx | Cromwell Property vs. Bright Scholar Education | Cromwell Property vs. Apogee Therapeutics, Common | Cromwell Property vs. Abcellera Biologics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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