Correlation Between BBB Foods and Getty Images
Can any of the company-specific risk be diversified away by investing in both BBB Foods and Getty Images 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 BBB Foods and Getty Images into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Getty Images Holdings, you can compare the effects of market volatilities on BBB Foods and Getty Images 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 BBB Foods with a short position of Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Getty Images.
Diversification Opportunities for BBB Foods and Getty Images
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BBB and Getty is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings and BBB 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 BBB Foods are associated (or correlated) with Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of BBB Foods i.e., BBB Foods and Getty Images go up and down completely randomly.
Pair Corralation between BBB Foods and Getty Images
Given the investment horizon of 90 days BBB Foods is expected to under-perform the Getty Images. But the stock apears to be less risky and, when comparing its historical volatility, BBB Foods is 1.86 times less risky than Getty Images. The stock trades about -0.06 of its potential returns per unit of risk. The Getty Images Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 290.00 in Getty Images Holdings on November 18, 2024 and sell it today you would lose (26.00) from holding Getty Images Holdings or give up 8.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BBB Foods vs. Getty Images Holdings
Performance |
| Timeline |
| BBB Foods |
| Getty Images Holdings |
BBB Foods and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and Getty Images
The main advantage of trading using opposite BBB Foods and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.| BBB Foods vs. Ryanair Holdings PLC | BBB Foods vs. Sun Country Airlines | BBB Foods vs. United Airlines Holdings | BBB Foods vs. Volaris |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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