Correlation Between RETAIL FOOD and Thyssenkrupp

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

Diversification Opportunities for RETAIL FOOD and Thyssenkrupp

-0.67

Correlation Coefficient

RETAIL FOOD  Thyssenkrupp

Excellent diversification

The 3 months correlation between RETAIL and Thyssenkrupp is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Thyssenkrupp go up and down completely randomly.

Pair Corralation between RETAIL FOOD and Thyssenkrupp

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Thyssenkrupp. But the stock apears to be less risky and, when comparing its historical volatility, RETAIL FOOD GROUP is 1.68 times less risky than Thyssenkrupp. The stock trades about -0.13 of its potential returns per unit of risk. The thyssenkrupp AG is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  376.00  in thyssenkrupp AG on December 23, 2024 and sell it today you would earn a total of  566.00  from holding thyssenkrupp AG or generate 150.53% return on investment over 90 days.

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

RETAIL FOOD GROUP  vs.  thyssenkrupp AG

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.

thyssenkrupp AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in thyssenkrupp AG are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Thyssenkrupp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RETAIL FOOD and Thyssenkrupp

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

The idea behind RETAIL FOOD GROUP and thyssenkrupp AG 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.