Correlation Between Associated British and Lery Seafood

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Can any of the company-specific risk be diversified away by investing in both Associated British and Lery Seafood 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 Associated British and Lery Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated British Foods and Lery Seafood Group, you can compare the effects of market volatilities on Associated British and Lery Seafood 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 Associated British with a short position of Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Lery Seafood.

Diversification Opportunities for Associated British and Lery Seafood

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Associated British and Lery Seafood

If you would invest  2,013  in Associated British Foods on December 30, 2023 and sell it today you would earn a total of  1,140  from holding Associated British Foods or generate 56.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Associated British Foods  vs.  Lery Seafood Group

 Performance 
       Timeline  
Associated British Foods 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Associated British Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Associated British may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Lery Seafood Group 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Good
Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Lery Seafood is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Associated British and Lery Seafood Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Associated British and Lery Seafood

The main advantage of trading using opposite Associated British and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.
The idea behind Associated British Foods and Lery Seafood Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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