Correlation Between Swift Foods and Century Pacific

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

By analyzing existing cross correlation between Swift Foods and Century Pacific Food, you can compare the effects of market volatilities on Swift Foods and Century Pacific 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 Swift Foods with a short position of Century Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swift Foods and Century Pacific.

Diversification Opportunities for Swift Foods and Century Pacific

-0.1

Correlation Coefficient

Swift Foods  Century Pacific

Good diversification

The 3 months correlation between Swift and Century is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Swift Foods and Century Pacific Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Pacific Food and Swift 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 Swift Foods are associated (or correlated) with Century Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Pacific Food has no effect on the direction of Swift Foods i.e., Swift Foods and Century Pacific go up and down completely randomly.

Pair Corralation between Swift Foods and Century Pacific

Assuming the 90 days trading horizon Swift Foods is expected to generate 4.66 times more return on investment than Century Pacific. However, Swift Foods is 4.66 times more volatile than Century Pacific Food. It trades about 0.05 of its potential returns per unit of risk. Century Pacific Food is currently generating about 0.04 per unit of risk. If you would invest  4.90  in Swift Foods on April 21, 2025 and sell it today you would earn a total of  0.10  from holding Swift Foods or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.52%
Values	Daily Returns

Swift Foods  vs.  Century Pacific Food

Swift Foods

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Swift Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Swift Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Century Pacific Food

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Century Pacific Food are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Century Pacific is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Swift Foods and Century Pacific

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

The idea behind Swift Foods and Century Pacific Food 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.