Correlation Between Millennium Food and Strauss

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

By analyzing existing cross correlation between Millennium Food Tech LP and Strauss Group, you can compare the effects of market volatilities on Millennium Food and Strauss 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 Millennium Food with a short position of Strauss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Millennium Food and Strauss.

Diversification Opportunities for Millennium Food and Strauss

-0.57

Correlation Coefficient

Millennium Food  Strauss

Excellent diversification

The 3 months correlation between Millennium and Strauss is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Food Tech LP and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group and Millennium 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 Millennium Food Tech LP are associated (or correlated) with Strauss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of Millennium Food i.e., Millennium Food and Strauss go up and down completely randomly.

Pair Corralation between Millennium Food and Strauss

Assuming the 90 days trading horizon Millennium Food Tech LP is expected to under-perform the Strauss. In addition to that, Millennium Food is 1.34 times more volatile than Strauss Group. It trades about -0.07 of its total potential returns per unit of risk. Strauss Group is currently generating about 0.2 per unit of volatility. If you would invest  565,200  in Strauss Group on September 3, 2024 and sell it today you would earn a total of  124,600  from holding Strauss Group or generate 22.05% return on investment over 90 days.

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

Millennium Food Tech LP  vs.  Strauss Group

Millennium Food Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Millennium Food Tech LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Strauss Group

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Strauss Group are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Strauss sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Millennium Food and Strauss

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

The idea behind Millennium Food Tech LP and Strauss Group 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.