Correlation Between Collins Foods and PATTIES FOODS
Can any of the company-specific risk be diversified away by investing in both Collins Foods and PATTIES FOODS 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 PATTIES FOODS 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 PATTIES FOODS , you can compare the effects of market volatilities on Collins Foods and PATTIES FOODS 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 PATTIES FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and PATTIES FOODS.
Diversification Opportunities for Collins Foods and PATTIES FOODS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Collins and PATTIES is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods Limited and PATTIES FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATTIES FOODS 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 PATTIES FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATTIES FOODS has no effect on the direction of Collins Foods i.e., Collins Foods and PATTIES FOODS go up and down completely randomly.
Pair Corralation between Collins Foods and PATTIES FOODS
Assuming the 90 days horizon Collins Foods is expected to generate 6.0 times less return on investment than PATTIES FOODS. But when comparing it to its historical volatility, Collins Foods Limited is 1.79 times less risky than PATTIES FOODS. It trades about 0.08 of its potential returns per unit of risk. PATTIES FOODS is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 31.00 in PATTIES FOODS on April 20, 2025 and sell it today you would earn a total of 36.00 from holding PATTIES FOODS or generate 116.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Collins Foods Limited vs. PATTIES FOODS
Performance |
Timeline |
Collins Foods Limited |
PATTIES FOODS |
Collins Foods and PATTIES FOODS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Collins Foods and PATTIES FOODS
The main advantage of trading using opposite Collins Foods and PATTIES FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods position performs unexpectedly, PATTIES FOODS 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 PATTIES FOODS will offset losses from the drop in PATTIES FOODS's long position.Collins Foods vs. Kaiser Aluminum | Collins Foods vs. CORNISH METALS INC | Collins Foods vs. AMAG Austria Metall | Collins Foods vs. US Physical Therapy |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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