Correlation Between Romana Food and Perceptive Capital

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

By analyzing existing cross correlation between Romana Food Brands and Perceptive Capital Solutions, you can compare the effects of market volatilities on Romana Food and Perceptive Capital 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 Romana Food with a short position of Perceptive Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romana Food and Perceptive Capital.

Diversification Opportunities for Romana Food and Perceptive Capital

0.0

Correlation Coefficient

Romana Food  Perceptive Capital

Pay attention - limited upside

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

Pair Corralation between Romana Food and Perceptive Capital

If you would invest  0.00  in Perceptive Capital Solutions on October 9, 2024 and sell it today you would earn a total of  1,018  from holding Perceptive Capital Solutions or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	58.7%
Values	Daily Returns

Romana Food Brands  vs.  Perceptive Capital Solutions

Romana Food Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Romana Food Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Romana Food is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Perceptive Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Perceptive Capital Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Perceptive Capital is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Romana Food and Perceptive Capital

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

The idea behind Romana Food Brands and Perceptive Capital Solutions 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.

Check out your portfolio center.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.