Correlation Between Retail Food and Foreign Trade

Can any of the company-specific risk be diversified away by investing in both Retail Food and Foreign Trade 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 Retail Food and Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Retail Food Group and Foreign Trade Bank, you can compare the effects of market volatilities on Retail Food and Foreign Trade 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 Retail Food with a short position of Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Food and Foreign Trade.

Diversification Opportunities for Retail Food and Foreign Trade

0.0

Correlation Coefficient

Retail Food  Foreign Trade

Pay attention - limited upside

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

Pair Corralation between Retail Food and Foreign Trade

If you would invest  160.00  in Retail Food Group on September 4, 2025 and sell it today you would earn a total of  0.00  from holding Retail Food Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Retail Food Group  vs.  Foreign Trade Bank

Retail Food Group

Risk-Adjusted Performance

Weakest

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

Foreign Trade Bank

Risk-Adjusted Performance

Weakest

Over the last 90 days Foreign Trade Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Foreign Trade is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Retail Food and Foreign Trade

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

The idea behind Retail Food Group and Foreign Trade Bank 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.