Correlation Between Flowers Foods and British Amer
Can any of the company-specific risk be diversified away by investing in both Flowers Foods and British Amer 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 British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and British American Tobacco, you can compare the effects of market volatilities on Flowers Foods and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and British Amer.
Diversification Opportunities for Flowers Foods and British Amer
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Flowers and British is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Flowers Foods i.e., Flowers Foods and British Amer go up and down completely randomly.
Pair Corralation between Flowers Foods and British Amer
Considering the 90-day investment horizon Flowers Foods is expected to generate 1.23 times more return on investment than British Amer. However, Flowers Foods is 1.23 times more volatile than British American Tobacco. It trades about 0.3 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.09 per unit of risk. If you would invest 2,325 in Flowers Foods on January 25, 2024 and sell it today you would earn a total of 177.00 from holding Flowers Foods or generate 7.61% 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. British American Tobacco
Performance |
Timeline |
Flowers Foods |
British American Tobacco |
Flowers Foods and British Amer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flowers Foods and British Amer
The main advantage of trading using opposite Flowers Foods and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.Flowers Foods vs. ConAgra Foods | Flowers Foods vs. McCormick Company Incorporated | Flowers Foods vs. Campbell Soup | Flowers Foods vs. Kellanova |
British Amer vs. Universal | British Amer vs. Imperial Brands PLC | British Amer vs. Philip Morris International | British Amer vs. Japan Tobacco ADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |