Correlation Between Edita Food and DS Smith
Can any of the company-specific risk be diversified away by investing in both Edita Food and DS Smith 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 Edita Food and DS Smith into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and DS Smith PLC, you can compare the effects of market volatilities on Edita Food and DS Smith 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 Edita Food with a short position of DS Smith. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and DS Smith.
Diversification Opportunities for Edita Food and DS Smith
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Edita and SMDS is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and DS Smith PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DS Smith PLC and Edita Food 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 Edita Food Industries are associated (or correlated) with DS Smith. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DS Smith PLC has no effect on the direction of Edita Food i.e., Edita Food and DS Smith go up and down completely randomly.
Pair Corralation between Edita Food and DS Smith
If you would invest 200.00 in Edita Food Industries on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Edita Food Industries or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Edita Food Industries vs. DS Smith PLC
Performance |
Timeline |
Edita Food Industries |
DS Smith PLC |
Edita Food and DS Smith Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Edita Food and DS Smith
The main advantage of trading using opposite Edita Food and DS Smith positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food position performs unexpectedly, DS Smith 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 DS Smith will offset losses from the drop in DS Smith's long position.Edita Food vs. Premier Foods PLC | Edita Food vs. Hilton Food Group | Edita Food vs. iShares Physical Silver | Edita Food vs. Invesco Physical Silver |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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