Correlation Between Right On and Greencore Group

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

By analyzing existing cross correlation between Right On Brands and Greencore Group PLC, you can compare the effects of market volatilities on Right On and Greencore Group 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 Right On with a short position of Greencore Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Right On and Greencore Group.

Diversification Opportunities for Right On and Greencore Group

-0.46

Correlation Coefficient

Right On  Greencore Group

Very good diversification

The 3 months correlation between Right and Greencore is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Right On Brands and Greencore Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencore Group PLC and Right On 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 Right On Brands are associated (or correlated) with Greencore Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencore Group PLC has no effect on the direction of Right On i.e., Right On and Greencore Group go up and down completely randomly.

Pair Corralation between Right On and Greencore Group

Given the investment horizon of 90 days Right On Brands is expected to generate 8.37 times more return on investment than Greencore Group. However, Right On is 8.37 times more volatile than Greencore Group PLC. It trades about 0.11 of its potential returns per unit of risk. Greencore Group PLC is currently generating about 0.07 per unit of risk. If you would invest  5.10  in Right On Brands on September 24, 2024 and sell it today you would lose (0.10) from holding Right On Brands or give up 1.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Right On Brands  vs.  Greencore Group PLC

Right On Brands

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Right On Brands are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Right On displayed solid returns over the last few months and may actually be approaching a breakup point.

Greencore Group PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greencore Group PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Greencore Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Right On and Greencore Group

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

The idea behind Right On Brands and Greencore Group PLC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.