Correlation Between Woolworths and Beston Global
Can any of the company-specific risk be diversified away by investing in both Woolworths and Beston Global 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 Woolworths and Beston Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woolworths and Beston Global Food, you can compare the effects of market volatilities on Woolworths and Beston Global 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 Woolworths with a short position of Beston Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woolworths and Beston Global.
Diversification Opportunities for Woolworths and Beston Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Woolworths and Beston is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Woolworths and Beston Global Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beston Global Food and Woolworths 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 Woolworths are associated (or correlated) with Beston Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beston Global Food has no effect on the direction of Woolworths i.e., Woolworths and Beston Global go up and down completely randomly.
Pair Corralation between Woolworths and Beston Global
If you would invest 2,996 in Woolworths on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Woolworths or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woolworths vs. Beston Global Food
Performance |
| Timeline |
| Woolworths |
| Beston Global Food |
Woolworths and Beston Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woolworths and Beston Global
The main advantage of trading using opposite Woolworths and Beston Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woolworths position performs unexpectedly, Beston Global 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 Beston Global will offset losses from the drop in Beston Global's long position.| Woolworths vs. Hutchison Telecommunications | Woolworths vs. Iron Road | Woolworths vs. Flagship Investments | Woolworths vs. A1 Investments Resources |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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