Correlation Between Tyson Foods and Metro AG
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Metro AG 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 Metro AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Metro AG, you can compare the effects of market volatilities on Tyson Foods and Metro AG 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 Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Metro AG.
Diversification Opportunities for Tyson Foods and Metro AG
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Metro is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG 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 Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of Tyson Foods i.e., Tyson Foods and Metro AG go up and down completely randomly.
Pair Corralation between Tyson Foods and Metro AG
Assuming the 90 days trading horizon Tyson Foods is expected to generate 0.56 times more return on investment than Metro AG. However, Tyson Foods is 1.8 times less risky than Metro AG. It trades about 0.02 of its potential returns per unit of risk. Metro AG is currently generating about -0.01 per unit of risk. If you would invest 5,616 in Tyson Foods on September 4, 2024 and sell it today you would earn a total of 520.00 from holding Tyson Foods or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tyson Foods vs. Metro AG
Performance |
| Timeline |
| Tyson Foods |
| Metro AG |
Tyson Foods and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Metro AG
The main advantage of trading using opposite Tyson Foods and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG'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 |
| Metro AG vs. Astral Foods Limited | Metro AG vs. TYSON FOODS A | Metro AG vs. MOLSON RS BEVERAGE | Metro AG vs. Collins Foods Limited |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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