Correlation Between Exotic Food and Make To
Can any of the company-specific risk be diversified away by investing in both Exotic Food and Make To 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 Exotic Food and Make To into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exotic Food Public and Make To Win, you can compare the effects of market volatilities on Exotic Food and Make To 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 Exotic Food with a short position of Make To. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exotic Food and Make To.
Diversification Opportunities for Exotic Food and Make To
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exotic and Make is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Exotic Food Public and Make To Win in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Make To Win and Exotic 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 Exotic Food Public are associated (or correlated) with Make To. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Make To Win has no effect on the direction of Exotic Food i.e., Exotic Food and Make To go up and down completely randomly.
Pair Corralation between Exotic Food and Make To
Assuming the 90 days horizon Exotic Food Public is expected to generate 0.91 times more return on investment than Make To. However, Exotic Food Public is 1.1 times less risky than Make To. It trades about 0.02 of its potential returns per unit of risk. Make To Win is currently generating about -0.07 per unit of risk. If you would invest 1,962 in Exotic Food Public on August 27, 2024 and sell it today you would earn a total of 68.00 from holding Exotic Food Public or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exotic Food Public vs. Make To Win
Performance |
| Timeline |
| Exotic Food Public |
| Make To Win |
Exotic Food and Make To Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exotic Food and Make To
The main advantage of trading using opposite Exotic Food and Make To positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exotic Food position performs unexpectedly, Make To 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 Make To will offset losses from the drop in Make To's long position.| Exotic Food vs. Mega Lifesciences Public | Exotic Food vs. Com7 PCL | Exotic Food vs. Thai Union Group | Exotic Food vs. Jay Mart Public |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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