Correlation Between Tesco PLC and Sendas Distribuidora
Can any of the company-specific risk be diversified away by investing in both Tesco PLC and Sendas Distribuidora 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 Tesco PLC and Sendas Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tesco PLC and Sendas Distribuidora SA, you can compare the effects of market volatilities on Tesco PLC and Sendas Distribuidora 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 Tesco PLC with a short position of Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tesco PLC and Sendas Distribuidora.
Diversification Opportunities for Tesco PLC and Sendas Distribuidora
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tesco and Sendas is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tesco PLC and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora and Tesco PLC 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 Tesco PLC are associated (or correlated) with Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Tesco PLC i.e., Tesco PLC and Sendas Distribuidora go up and down completely randomly.
Pair Corralation between Tesco PLC and Sendas Distribuidora
Assuming the 90 days horizon Tesco PLC is expected to under-perform the Sendas Distribuidora. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tesco PLC is 2.45 times less risky than Sendas Distribuidora. The pink sheet trades about -0.15 of its potential returns per unit of risk. The Sendas Distribuidora SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Sendas Distribuidora SA on August 28, 2024 and sell it today you would lose (12.00) from holding Sendas Distribuidora SA or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tesco PLC vs. Sendas Distribuidora SA
Performance |
| Timeline |
| Tesco PLC |
| Sendas Distribuidora |
Tesco PLC and Sendas Distribuidora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tesco PLC and Sendas Distribuidora
The main advantage of trading using opposite Tesco PLC and Sendas Distribuidora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesco PLC position performs unexpectedly, Sendas Distribuidora 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 Sendas Distribuidora will offset losses from the drop in Sendas Distribuidora's long position.| Tesco PLC vs. Ocado Group PLC | Tesco PLC vs. Dairy Farm International | Tesco PLC vs. Woolworths Group Limited | Tesco PLC vs. Kesko Oyj ADR |
| Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
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 CEOs Directory module to screen CEOs from public companies around the world.
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