Correlation Between Victory Supermarket and Globrands
Can any of the company-specific risk be diversified away by investing in both Victory Supermarket and Globrands 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 Victory Supermarket and Globrands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Supermarket Chain and Globrands Group, you can compare the effects of market volatilities on Victory Supermarket and Globrands 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 Victory Supermarket with a short position of Globrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Supermarket and Globrands.
Diversification Opportunities for Victory Supermarket and Globrands
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victory and Globrands is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Victory Supermarket Chain and Globrands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globrands Group and Victory Supermarket 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 Victory Supermarket Chain are associated (or correlated) with Globrands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globrands Group has no effect on the direction of Victory Supermarket i.e., Victory Supermarket and Globrands go up and down completely randomly.
Pair Corralation between Victory Supermarket and Globrands
Assuming the 90 days trading horizon Victory Supermarket Chain is expected to generate 2.43 times more return on investment than Globrands. However, Victory Supermarket is 2.43 times more volatile than Globrands Group. It trades about 0.28 of its potential returns per unit of risk. Globrands Group is currently generating about 0.59 per unit of risk. If you would invest 495,100 in Victory Supermarket Chain on August 28, 2024 and sell it today you would earn a total of 46,600 from holding Victory Supermarket Chain or generate 9.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory Supermarket Chain vs. Globrands Group
Performance |
| Timeline |
| Victory Supermarket Chain |
| Globrands Group |
Victory Supermarket and Globrands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Supermarket and Globrands
The main advantage of trading using opposite Victory Supermarket and Globrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Supermarket position performs unexpectedly, Globrands 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 Globrands will offset losses from the drop in Globrands' long position.The idea behind Victory Supermarket Chain and Globrands Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Globrands vs. Diplomat Holdings | Globrands vs. Tiv Taam | Globrands vs. Victory Supermarket Chain | Globrands vs. Neto ME Holdings |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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