Correlation Between Metcash and Sysco
Can any of the company-specific risk be diversified away by investing in both Metcash and Sysco 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 Metcash and Sysco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metcash Limited and Sysco, you can compare the effects of market volatilities on Metcash and Sysco 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 Metcash with a short position of Sysco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metcash and Sysco.
Diversification Opportunities for Metcash and Sysco
Average diversification
The 3 months correlation between Metcash and Sysco is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Metcash Limited and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco and Metcash 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 Metcash Limited are associated (or correlated) with Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of Metcash i.e., Metcash and Sysco go up and down completely randomly.
Pair Corralation between Metcash and Sysco
Assuming the 90 days horizon Metcash Limited is expected to generate 0.64 times more return on investment than Sysco. However, Metcash Limited is 1.57 times less risky than Sysco. It trades about 0.12 of its potential returns per unit of risk. Sysco is currently generating about -0.17 per unit of risk. If you would invest 230.00 in Metcash Limited on January 25, 2024 and sell it today you would earn a total of 4.00 from holding Metcash Limited or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metcash Limited vs. Sysco
Performance |
| Timeline |
| Metcash Limited |
| Sysco |
Metcash and Sysco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metcash and Sysco
The main advantage of trading using opposite Metcash and Sysco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metcash position performs unexpectedly, Sysco 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 Sysco will offset losses from the drop in Sysco's long position.| Metcash vs. Jernimo Martins SGPS | Metcash vs. JERONIMO MARTINS UNADR2 | Metcash vs. US Foods Holding | Metcash vs. Metro AG |
| Sysco vs. Jernimo Martins SGPS | Sysco vs. JERONIMO MARTINS UNADR2 | Sysco vs. US Foods Holding | Sysco vs. Metro AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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