Correlation Between Tyson Foods and Electrolux Professional
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Electrolux Professional 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 Electrolux Professional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Electrolux Professional AB, you can compare the effects of market volatilities on Tyson Foods and Electrolux Professional 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 Electrolux Professional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Electrolux Professional.
Diversification Opportunities for Tyson Foods and Electrolux Professional
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tyson and Electrolux is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Electrolux Professional AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrolux Professional 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 are associated (or correlated) with Electrolux Professional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrolux Professional has no effect on the direction of Tyson Foods i.e., Tyson Foods and Electrolux Professional go up and down completely randomly.
Pair Corralation between Tyson Foods and Electrolux Professional
Assuming the 90 days trading horizon Tyson Foods is expected to generate 0.73 times more return on investment than Electrolux Professional. However, Tyson Foods is 1.37 times less risky than Electrolux Professional. It trades about 0.33 of its potential returns per unit of risk. Electrolux Professional AB is currently generating about -0.07 per unit of risk. If you would invest 5,352 in Tyson Foods on September 4, 2024 and sell it today you would earn a total of 784.00 from holding Tyson Foods or generate 14.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Electrolux Professional AB
Performance |
| Timeline |
| Tyson Foods |
| Electrolux Professional |
Tyson Foods and Electrolux Professional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Electrolux Professional
The main advantage of trading using opposite Tyson Foods and Electrolux Professional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Electrolux Professional 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 Electrolux Professional will offset losses from the drop in Electrolux Professional's long position.| Tyson Foods vs. BII Railway Transportation | Tyson Foods vs. GOLD ROAD RES | Tyson Foods vs. MAGNUM MINING EXP | Tyson Foods vs. Fukuyama Transporting Co |
| Electrolux Professional vs. Thai Beverage Public | Electrolux Professional vs. Tyson Foods | Electrolux Professional vs. COFCO Joycome Foods | Electrolux Professional vs. DeVry Education Group |
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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