Correlation Between Sligro Food and SPEAR Investments

Can any of the company-specific risk be diversified away by investing in both Sligro Food and SPEAR Investments 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 SPEAR Investments 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 SPEAR Investments I, you can compare the effects of market volatilities on Sligro Food and SPEAR Investments 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 SPEAR Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and SPEAR Investments.

Diversification Opportunities for Sligro Food and SPEAR Investments

-0.58

Correlation Coefficient

Sligro Food  SPEAR Investments

Excellent diversification

The 3 months correlation between Sligro and SPEAR is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and SPEAR Investments I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPEAR Investments 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 SPEAR Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPEAR Investments has no effect on the direction of Sligro Food i.e., Sligro Food and SPEAR Investments go up and down completely randomly.

Pair Corralation between Sligro Food and SPEAR Investments

Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the SPEAR Investments. In addition to that, Sligro Food is 1.96 times more volatile than SPEAR Investments I. It trades about -0.12 of its total potential returns per unit of risk. SPEAR Investments I is currently generating about -0.15 per unit of volatility. If you would invest  750.00  in SPEAR Investments I on April 22, 2025 and sell it today you would lose (60.00) from holding SPEAR Investments I or give up 8.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.67%
Values	Daily Returns

Sligro Food Group  vs.  SPEAR Investments I

Sligro Food Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sligro Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPEAR Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPEAR Investments I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Sligro Food and SPEAR Investments

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

The idea behind Sligro Food Group and SPEAR Investments I 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.