Correlation Between TYSON FOODS and Whitehaven Coal
Can any of the company-specific risk be diversified away by investing in both TYSON FOODS and Whitehaven Coal 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 TYSON FOODS and Whitehaven Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TYSON FOODS A and Whitehaven Coal Limited, you can compare the effects of market volatilities on TYSON FOODS and Whitehaven Coal 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 TYSON FOODS with a short position of Whitehaven Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TYSON FOODS and Whitehaven Coal.
Diversification Opportunities for TYSON FOODS and Whitehaven Coal
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TYSON and Whitehaven is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding TYSON FOODS A and Whitehaven Coal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitehaven Coal and TYSON 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 TYSON FOODS A are associated (or correlated) with Whitehaven Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitehaven Coal has no effect on the direction of TYSON FOODS i.e., TYSON FOODS and Whitehaven Coal go up and down completely randomly.
Pair Corralation between TYSON FOODS and Whitehaven Coal
Assuming the 90 days trading horizon TYSON FOODS A is expected to under-perform the Whitehaven Coal. But the stock apears to be less risky and, when comparing its historical volatility, TYSON FOODS A is 1.5 times less risky than Whitehaven Coal. The stock trades about -0.03 of its potential returns per unit of risk. The Whitehaven Coal Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Whitehaven Coal Limited on November 3, 2024 and sell it today you would lose (2.00) from holding Whitehaven Coal Limited or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TYSON FOODS A vs. Whitehaven Coal Limited
Performance |
| Timeline |
| TYSON FOODS A |
| Whitehaven Coal |
TYSON FOODS and Whitehaven Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TYSON FOODS and Whitehaven Coal
The main advantage of trading using opposite TYSON FOODS and Whitehaven Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TYSON FOODS position performs unexpectedly, Whitehaven Coal 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 Whitehaven Coal will offset losses from the drop in Whitehaven Coal's long position.| TYSON FOODS vs. Adtalem Global Education | TYSON FOODS vs. Strategic Education | TYSON FOODS vs. CAREER EDUCATION | TYSON FOODS vs. Zijin Mining Group |
| Whitehaven Coal vs. China Shenhua Energy | Whitehaven Coal vs. PT Bayan Resources | Whitehaven Coal vs. Yanzhou Coal Mining | Whitehaven Coal vs. Yanzhou Coal Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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