Correlation Between Flowers Foods and Baron Real
Can any of the company-specific risk be diversified away by investing in both Flowers Foods and Baron Real 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 Flowers Foods and Baron Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and Baron Real Estate, you can compare the effects of market volatilities on Flowers Foods and Baron Real 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 Flowers Foods with a short position of Baron Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and Baron Real.
Diversification Opportunities for Flowers Foods and Baron Real
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Flowers and Baron is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and Baron Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Real Estate and Flowers 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 Flowers Foods are associated (or correlated) with Baron Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Real Estate has no effect on the direction of Flowers Foods i.e., Flowers Foods and Baron Real go up and down completely randomly.
Pair Corralation between Flowers Foods and Baron Real
Considering the 90-day investment horizon Flowers Foods is expected to generate 0.82 times more return on investment than Baron Real. However, Flowers Foods is 1.21 times less risky than Baron Real. It trades about 0.18 of its potential returns per unit of risk. Baron Real Estate is currently generating about -0.31 per unit of risk. If you would invest 2,307 in Flowers Foods on January 20, 2024 and sell it today you would earn a total of 97.00 from holding Flowers Foods or generate 4.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Flowers Foods vs. Baron Real Estate
Performance |
Timeline |
Flowers Foods |
Baron Real Estate |
Flowers Foods and Baron Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flowers Foods and Baron Real
The main advantage of trading using opposite Flowers Foods and Baron Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods position performs unexpectedly, Baron Real 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 Baron Real will offset losses from the drop in Baron Real's long position.Flowers Foods vs. Green Globe International | Flowers Foods vs. Greenlane Holdings | Flowers Foods vs. 22nd Century Group | Flowers Foods vs. 1606 Corp |
Baron Real vs. Baron Opportunity Fund | Baron Real vs. Baron Global Advantage | Baron Real vs. Baron Partners Fund | Baron Real vs. Baron Focused Growth |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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