Correlation Between BBB Foods and TerraForm
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By analyzing existing cross correlation between BBB Foods and TerraForm Power 5, you can compare the effects of market volatilities on BBB Foods and TerraForm 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 TerraForm. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and TerraForm.
Diversification Opportunities for BBB Foods and TerraForm
Very good diversification
The 3 months correlation between BBB and TerraForm is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and TerraForm Power 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TerraForm Power 5 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 TerraForm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TerraForm Power 5 has no effect on the direction of BBB Foods i.e., BBB Foods and TerraForm go up and down completely randomly.
Pair Corralation between BBB Foods and TerraForm
Given the investment horizon of 90 days BBB Foods is expected to under-perform the TerraForm. In addition to that, BBB Foods is 3.37 times more volatile than TerraForm Power 5. It trades about -0.16 of its total potential returns per unit of risk. TerraForm Power 5 is currently generating about -0.2 per unit of volatility. If you would invest 9,760 in TerraForm Power 5 on September 1, 2024 and sell it today you would lose (378.00) from holding TerraForm Power 5 or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
BBB Foods vs. TerraForm Power 5
Performance |
| Timeline |
| BBB Foods |
| TerraForm Power 5 |
BBB Foods and TerraForm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and TerraForm
The main advantage of trading using opposite BBB Foods and TerraForm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods position performs unexpectedly, TerraForm 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 TerraForm will offset losses from the drop in TerraForm's long position.| BBB Foods vs. Ingles Markets Incorporated | BBB Foods vs. Sendas Distribuidora SA | BBB Foods vs. Grocery Outlet Holding | BBB Foods vs. Ocado Group plc |
| TerraForm vs. Microbot Medical | TerraForm vs. Mangazeya Mining | TerraForm vs. Cumberland Pharmaceuticals | TerraForm vs. NH Foods Ltd |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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