Correlation Between RETAIL FOOD and Mosaic

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

By analyzing existing cross correlation between RETAIL FOOD GROUP and The Mosaic, you can compare the effects of market volatilities on RETAIL FOOD and Mosaic 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 RETAIL FOOD with a short position of Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Mosaic.

Diversification Opportunities for RETAIL FOOD and Mosaic

-0.11

Correlation Coefficient

RETAIL FOOD  Mosaic

Good diversification

The 3 months correlation between RETAIL and Mosaic is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic and RETAIL 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 RETAIL FOOD GROUP are associated (or correlated) with Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Mosaic go up and down completely randomly.

Pair Corralation between RETAIL FOOD and Mosaic

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Mosaic. In addition to that, RETAIL FOOD is 1.29 times more volatile than The Mosaic. It trades about -0.13 of its total potential returns per unit of risk. The Mosaic is currently generating about 0.09 per unit of volatility. If you would invest  2,242  in The Mosaic on December 29, 2024 and sell it today you would earn a total of  282.00  from holding The Mosaic or generate 12.58% return on investment over 90 days.

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

RETAIL FOOD GROUP  vs.  The Mosaic

RETAIL FOOD GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Mosaic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mosaic reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RETAIL FOOD and Mosaic

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

The idea behind RETAIL FOOD GROUP and The Mosaic 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.