Correlation Between Dairy Farm and Restore Plc

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

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

Diversification Opportunities for Dairy Farm and Restore Plc

0.0

Correlation Coefficient

Dairy Farm  Restore Plc

Pay attention - limited upside

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

Pair Corralation between Dairy Farm and Restore Plc

If you would invest  21,166  in Restore plc on April 15, 2025 and sell it today you would earn a total of  5,184  from holding Restore plc or generate 24.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Dairy Farm International  vs.  Restore plc

Dairy Farm International

Risk-Adjusted Performance

Very Weak

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

Restore plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Restore plc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Restore Plc exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dairy Farm and Restore Plc

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

The idea behind Dairy Farm International and Restore 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 Commodity Directory module to find actively traded commodities issued by global exchanges.