Correlation Between Where Food and Stagwell
Can any of the company-specific risk be diversified away by investing in both Where Food and Stagwell 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 Where Food and Stagwell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Where Food Comes and Stagwell, you can compare the effects of market volatilities on Where Food and Stagwell 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 Where Food with a short position of Stagwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Where Food and Stagwell.
Diversification Opportunities for Where Food and Stagwell
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Where and Stagwell is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell and Where Food 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 Where Food Comes are associated (or correlated) with Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Where Food i.e., Where Food and Stagwell go up and down completely randomly.
Pair Corralation between Where Food and Stagwell
Given the investment horizon of 90 days Where Food Comes is expected to under-perform the Stagwell. But the stock apears to be less risky and, when comparing its historical volatility, Where Food Comes is 1.18 times less risky than Stagwell. The stock trades about -0.01 of its potential returns per unit of risk. The Stagwell is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 524.00 in Stagwell on September 2, 2024 and sell it today you would earn a total of 262.00 from holding Stagwell or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Where Food Comes vs. Stagwell
Performance |
| Timeline |
| Where Food Comes |
| Stagwell |
Where Food and Stagwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Where Food and Stagwell
The main advantage of trading using opposite Where Food and Stagwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food position performs unexpectedly, Stagwell 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 Stagwell will offset losses from the drop in Stagwell's long position.| Where Food vs. Ke Holdings | Where Food vs. nCino Inc | Where Food vs. Kingsoft Cloud Holdings | Where Food vs. Jfrog |
| Stagwell vs. ADTRAN Inc | Stagwell vs. Belden Inc | Stagwell vs. ADC Therapeutics SA | Stagwell vs. Comtech Telecommunications Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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