Correlation Between Stryve Foods and Tootsie Roll

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

By analyzing existing cross correlation between Stryve Foods and Tootsie Roll Industries, you can compare the effects of market volatilities on Stryve Foods and Tootsie Roll 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 Stryve Foods with a short position of Tootsie Roll. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stryve Foods and Tootsie Roll.

Diversification Opportunities for Stryve Foods and Tootsie Roll

0.08

Correlation Coefficient

Stryve Foods  Tootsie Roll

Significant diversification

The 3 months correlation between Stryve and Tootsie is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Stryve Foods and Tootsie Roll Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tootsie Roll Industries and Stryve Foods 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 Stryve Foods are associated (or correlated) with Tootsie Roll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tootsie Roll Industries has no effect on the direction of Stryve Foods i.e., Stryve Foods and Tootsie Roll go up and down completely randomly.

Pair Corralation between Stryve Foods and Tootsie Roll

Given the investment horizon of 90 days Stryve Foods is expected to generate 5.48 times more return on investment than Tootsie Roll. However, Stryve Foods is 5.48 times more volatile than Tootsie Roll Industries. It trades about 0.05 of its potential returns per unit of risk. Tootsie Roll Industries is currently generating about 0.03 per unit of risk. If you would invest  65.00  in Stryve Foods on December 19, 2024 and sell it today you would earn a total of  1.00  from holding Stryve Foods or generate 1.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	58.33%
Values	Daily Returns

Stryve Foods  vs.  Tootsie Roll Industries

Stryve Foods

Risk-Adjusted Performance

Insignificant

Over the last 90 days Stryve Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Stryve Foods showed solid returns over the last few months and may actually be approaching a breakup point.

Tootsie Roll Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tootsie Roll Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Tootsie Roll is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Stryve Foods and Tootsie Roll

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

The idea behind Stryve Foods and Tootsie Roll Industries 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.