Correlation Between Sligro Food and Brunel International
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Brunel International 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 Brunel International 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 Brunel International NV, you can compare the effects of market volatilities on Sligro Food and Brunel International 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 Brunel International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Brunel International.
Diversification Opportunities for Sligro Food and Brunel International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sligro and Brunel is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Brunel International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunel International 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 Brunel International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunel International has no effect on the direction of Sligro Food i.e., Sligro Food and Brunel International go up and down completely randomly.
Pair Corralation between Sligro Food and Brunel International
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Brunel International. In addition to that, Sligro Food is 1.08 times more volatile than Brunel International NV. It trades about -0.24 of its total potential returns per unit of risk. Brunel International NV is currently generating about -0.03 per unit of volatility. If you would invest 861.00 in Brunel International NV on August 25, 2024 and sell it today you would lose (14.00) from holding Brunel International NV or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Brunel International NV
Performance |
| Timeline |
| Sligro Food Group |
| Brunel International |
Sligro Food and Brunel International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Brunel International
The main advantage of trading using opposite Sligro Food and Brunel International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Brunel International 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 Brunel International will offset losses from the drop in Brunel International's long position.| Sligro Food vs. TKH Group NV | Sligro Food vs. Brunel International NV | Sligro Food vs. Koninklijke BAM Groep | Sligro Food vs. Koninklijke Vopak NV |
| Brunel International vs. Koninklijke BAM Groep | Brunel International vs. TKH Group NV | Brunel International vs. Fugro NV | Brunel International vs. Aalberts Industries NV |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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