Correlation Between Avonmore Capital and Mrs Bectors

Can any of the company-specific risk be diversified away by investing in both Avonmore Capital and Mrs Bectors 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 Avonmore Capital and Mrs Bectors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avonmore Capital Management and Mrs Bectors Food, you can compare the effects of market volatilities on Avonmore Capital and Mrs Bectors 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 Avonmore Capital with a short position of Mrs Bectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avonmore Capital and Mrs Bectors.

Diversification Opportunities for Avonmore Capital and Mrs Bectors

-0.06

Correlation Coefficient

Avonmore Capital  Mrs Bectors

Good diversification

The 3 months correlation between Avonmore and Mrs is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Avonmore Capital Management and Mrs Bectors Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mrs Bectors Food and Avonmore Capital 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 Avonmore Capital Management are associated (or correlated) with Mrs Bectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mrs Bectors Food has no effect on the direction of Avonmore Capital i.e., Avonmore Capital and Mrs Bectors go up and down completely randomly.

Pair Corralation between Avonmore Capital and Mrs Bectors

Assuming the 90 days trading horizon Avonmore Capital Management is expected to generate 2.99 times more return on investment than Mrs Bectors. However, Avonmore Capital is 2.99 times more volatile than Mrs Bectors Food. It trades about 0.33 of its potential returns per unit of risk. Mrs Bectors Food is currently generating about -0.29 per unit of risk. If you would invest  1,639  in Avonmore Capital Management on October 8, 2024 and sell it today you would earn a total of  702.00  from holding Avonmore Capital Management or generate 42.83% return on investment over 90 days.

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

Avonmore Capital Management  vs.  Mrs Bectors Food

Avonmore Capital Man

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Avonmore Capital Management are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Avonmore Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Mrs Bectors Food

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mrs Bectors Food has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Avonmore Capital and Mrs Bectors

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

The idea behind Avonmore Capital Management and Mrs Bectors Food 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.