Correlation Between Convenience Foods and ACL Plastics
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By analyzing existing cross correlation between Convenience Foods PLC and ACL Plastics PLC, you can compare the effects of market volatilities on Convenience Foods and ACL Plastics 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 Convenience Foods with a short position of ACL Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Convenience Foods and ACL Plastics.
Diversification Opportunities for Convenience Foods and ACL Plastics
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Convenience and ACL is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Convenience Foods PLC and ACL Plastics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACL Plastics PLC and Convenience Foods 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 Convenience Foods PLC are associated (or correlated) with ACL Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACL Plastics PLC has no effect on the direction of Convenience Foods i.e., Convenience Foods and ACL Plastics go up and down completely randomly.
Pair Corralation between Convenience Foods and ACL Plastics
Assuming the 90 days trading horizon Convenience Foods PLC is expected to generate 1.3 times more return on investment than ACL Plastics. However, Convenience Foods is 1.3 times more volatile than ACL Plastics PLC. It trades about 0.33 of its potential returns per unit of risk. ACL Plastics PLC is currently generating about 0.34 per unit of risk. If you would invest 82,325 in Convenience Foods PLC on August 31, 2024 and sell it today you would earn a total of 7,125 from holding Convenience Foods PLC or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Convenience Foods PLC vs. ACL Plastics PLC
Performance |
| Timeline |
| Convenience Foods PLC |
| ACL Plastics PLC |
Convenience Foods and ACL Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Convenience Foods and ACL Plastics
The main advantage of trading using opposite Convenience Foods and ACL Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Convenience Foods position performs unexpectedly, ACL Plastics 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 ACL Plastics will offset losses from the drop in ACL Plastics' long position.| Convenience Foods vs. HNB Finance | Convenience Foods vs. Prime Lands Residencies | Convenience Foods vs. Jat Holdings PLC | Convenience Foods vs. E M L |
| ACL Plastics vs. HNB Finance | ACL Plastics vs. Prime Lands Residencies | ACL Plastics vs. Jat Holdings PLC | ACL Plastics vs. E M L |
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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