Correlation Between Sligro Food and Global Power

Can any of the company-specific risk be diversified away by investing in both Sligro Food and Global Power 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 Sligro Food and Global Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sligro Food Group and Global Power Equipment, you can compare the effects of market volatilities on Sligro Food and Global Power 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 Sligro Food with a short position of Global Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Global Power.

Diversification Opportunities for Sligro Food and Global Power

0.0

Correlation Coefficient

Sligro Food  Global Power

Pay attention - limited upside

The 3 months correlation between Sligro and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Global Power Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Power Equipment and Sligro Food 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 Sligro Food Group are associated (or correlated) with Global Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Power Equipment has no effect on the direction of Sligro Food i.e., Sligro Food and Global Power go up and down completely randomly.

Pair Corralation between Sligro Food and Global Power

If you would invest (100.00) in Global Power Equipment on February 5, 2024 and sell it today you would earn a total of  100.00  from holding Global Power Equipment or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sligro Food Group  vs.  Global Power Equipment

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sligro Food is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Global Power Equipment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Power Equipment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Global Power is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sligro Food and Global Power

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

The idea behind Sligro Food Group and Global Power Equipment 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 Transaction History module to view history of all your transactions and understand their impact on performance.