Correlation Between Sligro Food and DFS Furniture

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Can any of the company-specific risk be diversified away by investing in both Sligro Food and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Sligro Food and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and DFS Furniture.

Diversification Opportunities for Sligro Food and DFS Furniture

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Sligro and DFS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Sligro Food i.e., Sligro Food and DFS Furniture go up and down completely randomly.

Pair Corralation between Sligro Food and DFS Furniture

Assuming the 90 days trading horizon Sligro Food is expected to generate 4.33 times less return on investment than DFS Furniture. In addition to that, Sligro Food is 1.42 times more volatile than DFS Furniture PLC. It trades about 0.04 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.27 per unit of volatility. If you would invest  13,050  in DFS Furniture PLC on April 21, 2025 and sell it today you would earn a total of  4,450  from holding DFS Furniture PLC or generate 34.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Sligro Food Group  vs.  DFS Furniture PLC

 Performance 
       Timeline  
Sligro Food Group 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sligro Food may actually be approaching a critical reversion point that can send shares even higher in August 2025.
DFS Furniture PLC 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in DFS Furniture PLC are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, DFS Furniture exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sligro Food and DFS Furniture Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sligro Food and DFS Furniture

The main advantage of trading using opposite Sligro Food and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.
The idea behind Sligro Food Group and DFS Furniture PLC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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