Correlation Between Invertec Foods and Multiexport Foods

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

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

Diversification Opportunities for Invertec Foods and Multiexport Foods

0.0

Correlation Coefficient

Invertec Foods  Multiexport Foods

Pay attention - limited upside

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

Pair Corralation between Invertec Foods and Multiexport Foods

If you would invest  19,364  in Multiexport Foods SA on September 13, 2024 and sell it today you would earn a total of  1,036  from holding Multiexport Foods SA or generate 5.35% return on investment over 90 days.

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

Invertec Foods SA  vs.  Multiexport Foods SA

Invertec Foods SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invertec Foods SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Invertec Foods is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Multiexport Foods

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Multiexport Foods SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Multiexport Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Invertec Foods and Multiexport Foods

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

The idea behind Invertec Foods SA and Multiexport Foods 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.