Correlation Between Challenger and My Foodie

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

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

Diversification Opportunities for Challenger and My Foodie

0.0

Correlation Coefficient

Challenger  My Foodie

Pay attention - limited upside

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

Pair Corralation between Challenger and My Foodie

If you would invest  0.40  in My Foodie Box on September 14, 2024 and sell it today you would earn a total of  0.00  from holding My Foodie Box or generate 0.0% return on investment over 90 days.

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

Challenger  vs.  My Foodie Box

Challenger

Risk-Adjusted Performance

0 of 100

Very Weak

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

My Foodie Box

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Challenger and My Foodie

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

The idea behind Challenger and My Foodie Box 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.