Correlation Between Sligro Food and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Tyson Foods 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 Tyson Foods 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 Tyson Foods, you can compare the effects of market volatilities on Sligro Food and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Tyson Foods.
Diversification Opportunities for Sligro Food and Tyson Foods
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sligro and Tyson is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Sligro Food i.e., Sligro Food and Tyson Foods go up and down completely randomly.
Pair Corralation between Sligro Food and Tyson Foods
Assuming the 90 days horizon Sligro Food Group is expected to under-perform the Tyson Foods. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 1.18 times less risky than Tyson Foods. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Tyson Foods is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,992 in Tyson Foods on August 30, 2024 and sell it today you would earn a total of 453.00 from holding Tyson Foods or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.07% |
| Values | Daily Returns |
Sligro Food Group vs. Tyson Foods
Performance |
| Timeline |
| Sligro Food Group |
| Tyson Foods |
Sligro Food and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Tyson Foods
The main advantage of trading using opposite Sligro Food and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Sligro Food vs. Legacy Education | Sligro Food vs. Apple Inc | Sligro Food vs. NVIDIA | Sligro Food vs. Microsoft |
| Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
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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