Correlation Between Strickland Metals and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Strickland Metals and Collins 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 Strickland Metals and Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strickland Metals and Collins Foods, you can compare the effects of market volatilities on Strickland Metals and Collins 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 Strickland Metals with a short position of Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strickland Metals and Collins Foods.
Diversification Opportunities for Strickland Metals and Collins Foods
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strickland and Collins is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Strickland Metals and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods and Strickland Metals 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 Strickland Metals are associated (or correlated) with Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Strickland Metals i.e., Strickland Metals and Collins Foods go up and down completely randomly.
Pair Corralation between Strickland Metals and Collins Foods
Assuming the 90 days trading horizon Strickland Metals is expected to under-perform the Collins Foods. But the stock apears to be less risky and, when comparing its historical volatility, Strickland Metals is 1.08 times less risky than Collins Foods. The stock trades about -0.2 of its potential returns per unit of risk. The Collins Foods is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 725.00 in Collins Foods on November 28, 2024 and sell it today you would earn a total of 76.00 from holding Collins Foods or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strickland Metals vs. Collins Foods
Performance |
| Timeline |
| Strickland Metals |
| Collins Foods |
Strickland Metals and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strickland Metals and Collins Foods
The main advantage of trading using opposite Strickland Metals and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strickland Metals position performs unexpectedly, Collins 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Strickland Metals vs. National Storage REIT | Strickland Metals vs. ABACUS STORAGE KING | Strickland Metals vs. Black Rock Mining | Strickland Metals vs. Dalaroo Metals |
| Collins Foods vs. Readytech Holdings | Collins Foods vs. Aussie Broadband | Collins Foods vs. EMvision Medical Devices | Collins Foods vs. Zoom2u Technologies |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |