Correlation Between Balkan Mining and Retail Food

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

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

Diversification Opportunities for Balkan Mining and Retail Food

0.42

Correlation Coefficient

Balkan Mining  Retail Food

Very weak diversification

The 3 months correlation between Balkan and Retail is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Balkan Mining and and Retail Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Food Group and Balkan Mining 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 Balkan Mining and are associated (or correlated) with Retail Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Food Group has no effect on the direction of Balkan Mining i.e., Balkan Mining and Retail Food go up and down completely randomly.

Pair Corralation between Balkan Mining and Retail Food

Assuming the 90 days trading horizon Balkan Mining and is expected to under-perform the Retail Food. In addition to that, Balkan Mining is 1.94 times more volatile than Retail Food Group. It trades about -0.04 of its total potential returns per unit of risk. Retail Food Group is currently generating about -0.02 per unit of volatility. If you would invest  400.00  in Retail Food Group on October 25, 2024 and sell it today you would lose (185.00) from holding Retail Food Group or give up 46.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Balkan Mining and  vs.  Retail Food Group

Balkan Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balkan Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Balkan Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Retail Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Retail Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Balkan Mining and Retail Food

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

The idea behind Balkan Mining and and Retail Food Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.