Correlation Between Sligro Food and DHI
Can any of the company-specific risk be diversified away by investing in both Sligro Food and DHI 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 DHI 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 DHI Group, you can compare the effects of market volatilities on Sligro Food and DHI 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 DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and DHI.
Diversification Opportunities for Sligro Food and DHI
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sligro and DHI is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Sligro Food i.e., Sligro Food and DHI go up and down completely randomly.
Pair Corralation between Sligro Food and DHI
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the DHI. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 1.91 times less risky than DHI. The pink sheet trades about -0.07 of its potential returns per unit of risk. The DHI Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 160.00 in DHI Group on September 12, 2024 and sell it today you would earn a total of 17.00 from holding DHI Group or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. DHI Group
Performance |
| Timeline |
| Sligro Food Group |
| DHI Group |
Sligro Food and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and DHI
The main advantage of trading using opposite Sligro Food and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.| Sligro Food vs. Avient Corp | Sligro Food vs. Eastman Chemical | Sligro Food vs. Ecovyst | Sligro Food vs. PepsiCo |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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