Correlation Between Supermarket Income and Edita Food
Can any of the company-specific risk be diversified away by investing in both Supermarket Income and Edita Food 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 Supermarket Income and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Supermarket Income REIT and Edita Food Industries, you can compare the effects of market volatilities on Supermarket Income and Edita Food 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 Supermarket Income with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supermarket Income and Edita Food.
Diversification Opportunities for Supermarket Income and Edita Food
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Supermarket and Edita is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Supermarket Income REIT and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and Supermarket Income 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 Supermarket Income REIT are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of Supermarket Income i.e., Supermarket Income and Edita Food go up and down completely randomly.
Pair Corralation between Supermarket Income and Edita Food
Assuming the 90 days trading horizon Supermarket Income is expected to generate 2.47 times less return on investment than Edita Food. But when comparing it to its historical volatility, Supermarket Income REIT is 1.84 times less risky than Edita Food. It trades about 0.0 of its potential returns per unit of risk. Edita Food Industries is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 206.00 in Edita Food Industries on November 28, 2024 and sell it today you would lose (20.00) from holding Edita Food Industries or give up 9.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Supermarket Income REIT vs. Edita Food Industries
Performance |
| Timeline |
| Supermarket Income REIT |
| Edita Food Industries |
Supermarket Income and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Supermarket Income and Edita Food
The main advantage of trading using opposite Supermarket Income and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supermarket Income position performs unexpectedly, Edita Food 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 Edita Food will offset losses from the drop in Edita Food's long position.| Supermarket Income vs. Automatic Data Processing | Supermarket Income vs. Extra Space Storage | Supermarket Income vs. Datalogic | Supermarket Income vs. Rosslyn Data Technologies |
| Edita Food vs. Omega Healthcare Investors | Edita Food vs. CVS Health Corp | Edita Food vs. Bellevue Healthcare Trust | Edita Food vs. Aeorema Communications Plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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