Correlation Between RETAIL FOOD and TOMBADOR IRON

Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and TOMBADOR IRON 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 TOMBADOR IRON 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 TOMBADOR IRON LTD, you can compare the effects of market volatilities on RETAIL FOOD and TOMBADOR IRON 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 TOMBADOR IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and TOMBADOR IRON.

Diversification Opportunities for RETAIL FOOD and TOMBADOR IRON

0.0

Correlation Coefficient

RETAIL FOOD  TOMBADOR IRON

Pay attention - limited upside

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

Pair Corralation between RETAIL FOOD and TOMBADOR IRON

If you would invest  10.00  in TOMBADOR IRON LTD on December 21, 2024 and sell it today you would earn a total of  0.00  from holding TOMBADOR IRON LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

RETAIL FOOD GROUP  vs.  TOMBADOR IRON LTD

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.

TOMBADOR IRON LTD

Risk-Adjusted Performance

Very Weak

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

Pair Trading with RETAIL FOOD and TOMBADOR IRON

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

The idea behind RETAIL FOOD GROUP and TOMBADOR IRON LTD 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.