Correlation Between PURE FOODS and SES SA

Can any of the company-specific risk be diversified away by investing in both PURE FOODS and SES SA 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 PURE FOODS and SES SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PURE FOODS TASMANIA and SES SA, you can compare the effects of market volatilities on PURE FOODS and SES SA 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 PURE FOODS with a short position of SES SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PURE FOODS and SES SA.

Diversification Opportunities for PURE FOODS and SES SA

-0.19

Correlation Coefficient

PURE FOODS  SES SA

Good diversification

The 3 months correlation between PURE and SES is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PURE FOODS TASMANIA and SES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES SA and PURE 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 PURE FOODS TASMANIA are associated (or correlated) with SES SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES SA has no effect on the direction of PURE FOODS i.e., PURE FOODS and SES SA go up and down completely randomly.

Pair Corralation between PURE FOODS and SES SA

If you would invest  1.05  in PURE FOODS TASMANIA on October 23, 2024 and sell it today you would earn a total of  0.00  from holding PURE FOODS TASMANIA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

PURE FOODS TASMANIA  vs.  SES SA

PURE FOODS TASMANIA

Risk-Adjusted Performance

0 of 100

Very Weak

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

SES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PURE FOODS and SES SA

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

The idea behind PURE FOODS TASMANIA and SES SA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.