Correlation Between Sligro Food and SURETRACK MON

Can any of the company-specific risk be diversified away by investing in both Sligro Food and SURETRACK MON 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 Sligro Food and SURETRACK MON into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sligro Food Group and SURETRACK MON , you can compare the effects of market volatilities on Sligro Food and SURETRACK MON 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 Sligro Food with a short position of SURETRACK MON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and SURETRACK MON.

Diversification Opportunities for Sligro Food and SURETRACK MON

-0.26

Correlation Coefficient

Sligro Food  SURETRACK MON

Very good diversification

The 3 months correlation between Sligro and SURETRACK is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and SURETRACK MON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SURETRACK MON and Sligro 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 Sligro Food Group are associated (or correlated) with SURETRACK MON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SURETRACK MON has no effect on the direction of Sligro Food i.e., Sligro Food and SURETRACK MON go up and down completely randomly.

Pair Corralation between Sligro Food and SURETRACK MON

Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the SURETRACK MON. But the stock apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 10.75 times less risky than SURETRACK MON. The stock trades about -0.14 of its potential returns per unit of risk. The SURETRACK MON is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  18.00  in SURETRACK MON on October 26, 2024 and sell it today you would earn a total of  82.00  from holding SURETRACK MON or generate 455.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sligro Food Group  vs.  SURETRACK MON

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SURETRACK MON

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SURETRACK MON are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, SURETRACK MON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sligro Food and SURETRACK MON

The main advantage of trading using opposite Sligro Food and SURETRACK MON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, SURETRACK MON 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 SURETRACK MON will offset losses from the drop in SURETRACK MON's long position.

The idea behind Sligro Food Group and SURETRACK MON 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.