Correlation Between Turning Point and Real Good
Can any of the company-specific risk be diversified away by investing in both Turning Point and Real Good 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 Turning Point and Real Good into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Real Good Food, you can compare the effects of market volatilities on Turning Point and Real Good 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 Turning Point with a short position of Real Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Real Good.
Diversification Opportunities for Turning Point and Real Good
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Turning and Real is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Real Good Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Good Food and Turning Point 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 Turning Point Brands are associated (or correlated) with Real Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Good Food has no effect on the direction of Turning Point i.e., Turning Point and Real Good go up and down completely randomly.
Pair Corralation between Turning Point and Real Good
Considering the 90-day investment horizon Turning Point is expected to generate 8.24 times less return on investment than Real Good. But when comparing it to its historical volatility, Turning Point Brands is 26.95 times less risky than Real Good. It trades about 0.13 of its potential returns per unit of risk. Real Good Food is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,652 in Real Good Food on November 1, 2024 and sell it today you would lose (5,637) from holding Real Good Food or give up 99.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.31% |
| Values | Daily Returns |
Turning Point Brands vs. Real Good Food
Performance |
| Timeline |
| Turning Point Brands |
| Real Good Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Turning Point and Real Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Real Good
The main advantage of trading using opposite Turning Point and Real Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, Real Good 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 Real Good will offset losses from the drop in Real Good's long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| Real Good vs. Seneca Foods Corp | Real Good vs. Central Garden Pet | Real Good vs. Central Garden Pet | Real Good vs. Natures Sunshine Products |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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