Correlation Between Primaris Retail and Goodfood Market

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

By analyzing existing cross correlation between Primaris Retail RE and Goodfood Market Corp, you can compare the effects of market volatilities on Primaris Retail and Goodfood Market 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 Primaris Retail with a short position of Goodfood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and Goodfood Market.

Diversification Opportunities for Primaris Retail and Goodfood Market

0.21

Correlation Coefficient

Primaris Retail  Goodfood Market

Modest diversification

The 3 months correlation between Primaris and Goodfood is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Goodfood Market Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfood Market Corp and Primaris Retail 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 Primaris Retail RE are associated (or correlated) with Goodfood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfood Market Corp has no effect on the direction of Primaris Retail i.e., Primaris Retail and Goodfood Market go up and down completely randomly.

Pair Corralation between Primaris Retail and Goodfood Market

Assuming the 90 days trading horizon Primaris Retail RE is expected to under-perform the Goodfood Market. But the stock apears to be less risky and, when comparing its historical volatility, Primaris Retail RE is 2.42 times less risky than Goodfood Market. The stock trades about -0.14 of its potential returns per unit of risk. The Goodfood Market Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Goodfood Market Corp on October 8, 2024 and sell it today you would lose (1.00) from holding Goodfood Market Corp or give up 2.44% of portfolio value over 90 days.

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

Primaris Retail RE  vs.  Goodfood Market Corp

Primaris Retail RE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Goodfood Market Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goodfood Market Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Goodfood Market displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Primaris Retail and Goodfood Market

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

The idea behind Primaris Retail RE and Goodfood Market Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.