Correlation Between Collins Foods and Experian Plc

Can any of the company-specific risk be diversified away by investing in both Collins Foods and Experian Plc 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 Collins Foods and Experian Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Collins Foods Limited and Experian plc, you can compare the effects of market volatilities on Collins Foods and Experian Plc 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 Collins Foods with a short position of Experian Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Experian Plc.

Diversification Opportunities for Collins Foods and Experian Plc

0.29

Correlation Coefficient

Collins Foods  Experian Plc

Modest diversification

The 3 months correlation between Collins and Experian is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and Experian plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Experian plc and Collins 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 Collins Foods Limited are associated (or correlated) with Experian Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Experian plc has no effect on the direction of Collins Foods i.e., Collins Foods and Experian Plc go up and down completely randomly.

Pair Corralation between Collins Foods and Experian Plc

Assuming the 90 days horizon Collins Foods is expected to generate 1.08 times less return on investment than Experian Plc. In addition to that, Collins Foods is 2.08 times more volatile than Experian plc. It trades about 0.07 of its total potential returns per unit of risk. Experian plc is currently generating about 0.15 per unit of volatility. If you would invest  4,125  in Experian plc on April 23, 2025 and sell it today you would earn a total of  555.00  from holding Experian plc or generate 13.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Collins Foods Limited  vs.  Experian plc

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Collins Foods may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Experian plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Experian plc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Experian Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Collins Foods and Experian Plc

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

The idea behind Collins Foods Limited and Experian 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.