Correlation Between PF Bakkafrost and Bunzl Plc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PF Bakkafrost and Bunzl Plc 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 PF Bakkafrost and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PF Bakkafrost and Bunzl plc, you can compare the effects of market volatilities on PF Bakkafrost and Bunzl Plc 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 PF Bakkafrost with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PF Bakkafrost and Bunzl Plc.

Diversification Opportunities for PF Bakkafrost and Bunzl Plc

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 6BF and Bunzl is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PF Bakkafrost and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and PF Bakkafrost 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 PF Bakkafrost are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of PF Bakkafrost i.e., PF Bakkafrost and Bunzl Plc go up and down completely randomly.

Pair Corralation between PF Bakkafrost and Bunzl Plc

Assuming the 90 days horizon PF Bakkafrost is expected to generate 1.27 times more return on investment than Bunzl Plc. However, PF Bakkafrost is 1.27 times more volatile than Bunzl plc. It trades about -0.08 of its potential returns per unit of risk. Bunzl plc is currently generating about -0.35 per unit of risk. If you would invest  5,590  in PF Bakkafrost on October 4, 2024 and sell it today you would lose (160.00) from holding PF Bakkafrost or give up 2.86% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

PF Bakkafrost  vs.  Bunzl plc

 Performance 
       Timeline  
PF Bakkafrost 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in PF Bakkafrost are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PF Bakkafrost is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
Bunzl plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bunzl plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Bunzl Plc is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

PF Bakkafrost and Bunzl Plc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PF Bakkafrost and Bunzl Plc

The main advantage of trading using opposite PF Bakkafrost and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PF Bakkafrost position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.
The idea behind PF Bakkafrost and Bunzl plc 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.
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

Other Complementary Tools

Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
CEOs Directory
Screen CEOs from public companies around the world