Correlation Between Sligro Food and DFS Furniture
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sligro Food Group vs. DFS Furniture PLC
Performance |
Timeline |
Sligro Food Group |
DFS Furniture PLC |
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.Sligro Food vs. Fiinu PLC | Sligro Food vs. AFC Energy plc | Sligro Food vs. Argo Blockchain PLC | Sligro Food vs. SANTANDER UK 10 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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