Correlation Between Convenience Foods and Central Industries
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By analyzing existing cross correlation between Convenience Foods PLC and Central Industries PLC, you can compare the effects of market volatilities on Convenience Foods and Central Industries 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 Central Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Convenience Foods and Central Industries.
Diversification Opportunities for Convenience Foods and Central Industries
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Convenience and Central is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Convenience Foods PLC and Central Industries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Industries 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 Central Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Industries PLC has no effect on the direction of Convenience Foods i.e., Convenience Foods and Central Industries go up and down completely randomly.
Pair Corralation between Convenience Foods and Central Industries
Assuming the 90 days trading horizon Convenience Foods PLC is expected to under-perform the Central Industries. But the stock apears to be less risky and, when comparing its historical volatility, Convenience Foods PLC is 1.22 times less risky than Central Industries. The stock trades about -0.06 of its potential returns per unit of risk. The Central Industries PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,290 in Central Industries PLC on September 5, 2024 and sell it today you would earn a total of 5,310 from holding Central Industries PLC or generate 84.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 70.06% |
| Values | Daily Returns |
Convenience Foods PLC vs. Central Industries PLC
Performance |
| Timeline |
| Convenience Foods PLC |
| Central Industries PLC |
Convenience Foods and Central Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Convenience Foods and Central Industries
The main advantage of trading using opposite Convenience Foods and Central Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Convenience Foods position performs unexpectedly, Central Industries 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 Central Industries will offset losses from the drop in Central Industries' long position.| Convenience Foods vs. Singhe Hospitals | Convenience Foods vs. Commercial Credit and | Convenience Foods vs. Renuka Agri Foods | Convenience Foods vs. Janashakthi Insurance |
| Central Industries vs. Convenience Foods PLC | Central Industries vs. Ceylinco Insurance PLC | Central Industries vs. RENUKA FOODS PLC | Central Industries vs. HATTON NATIONAL BANK |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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