Correlation Between Total Produce and Europac International

Can any of the company-specific risk be diversified away by investing in both Total Produce and Europac International 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 Total Produce and Europac International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Total Produce Plc and Europac International Value, you can compare the effects of market volatilities on Total Produce and Europac International 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 Total Produce with a short position of Europac International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Produce and Europac International.

Diversification Opportunities for Total Produce and Europac International

0.0

Correlation Coefficient

Total Produce  Europac International

Pay attention - limited upside

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

Pair Corralation between Total Produce and Europac International

If you would invest  975.00  in Europac International Value on January 19, 2024 and sell it today you would earn a total of  5.00  from holding Europac International Value or generate 0.51% return on investment over 90 days.

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

Total Produce Plc  vs.  Europac International Value

Total Produce Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total Produce Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Total Produce is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Europac International

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Europac International Value are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Europac International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Total Produce and Europac International

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

The idea behind Total Produce Plc and Europac International Value 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.