Correlation Between Olam International and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both Olam International and Bunzl Plc 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 Olam International and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olam International Limited and Bunzl plc, you can compare the effects of market volatilities on Olam International and Bunzl Plc 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 Olam International with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olam International and Bunzl Plc.
Diversification Opportunities for Olam International and Bunzl Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Olam and Bunzl is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Olam International Limited and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and Olam International 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 Olam International Limited are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of Olam International i.e., Olam International and Bunzl Plc go up and down completely randomly.
Pair Corralation between Olam International and Bunzl Plc
If you would invest 3,666 in Bunzl plc on February 10, 2024 and sell it today you would earn a total of 184.00 from holding Bunzl plc or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Olam International Limited vs. Bunzl plc
Performance |
| Timeline |
| Olam International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bunzl plc |
Olam International and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olam International and Bunzl Plc
The main advantage of trading using opposite Olam International and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olam International position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.| Olam International vs. Tower Semiconductor | Olam International vs. Braskem SA Class | Olam International vs. Microchip Technology | Olam International vs. Amkor Technology |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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