Correlation Between Borealis Foods and MCCORMICK INC

Can any of the company-specific risk be diversified away by investing in both Borealis Foods and MCCORMICK INC 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 Borealis Foods and MCCORMICK INC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Borealis Foods and MCCORMICK INC, you can compare the effects of market volatilities on Borealis Foods and MCCORMICK INC 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 Borealis Foods with a short position of MCCORMICK INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borealis Foods and MCCORMICK INC.

Diversification Opportunities for Borealis Foods and MCCORMICK INC

0.0

Correlation Coefficient

Borealis Foods  MCCORMICK INC

Pay attention - limited upside

The 3 months correlation between Borealis and MCCORMICK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Borealis Foods and MCCORMICK INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCCORMICK INC and Borealis Foods 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 Borealis Foods are associated (or correlated) with MCCORMICK INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCCORMICK INC has no effect on the direction of Borealis Foods i.e., Borealis Foods and MCCORMICK INC go up and down completely randomly.

Pair Corralation between Borealis Foods and MCCORMICK INC

If you would invest  6.50  in Borealis Foods on October 27, 2024 and sell it today you would earn a total of  5.50  from holding Borealis Foods or generate 84.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Borealis Foods  vs.  MCCORMICK INC

Borealis Foods

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Borealis Foods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Borealis Foods showed solid returns over the last few months and may actually be approaching a breakup point.

MCCORMICK INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCCORMICK INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, MCCORMICK INC is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Borealis Foods and MCCORMICK INC

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

The idea behind Borealis Foods and MCCORMICK INC 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.