Correlation Between Ralph Lauren and Sadot

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

By analyzing existing cross correlation between Ralph Lauren Corp and Sadot Group, you can compare the effects of market volatilities on Ralph Lauren and Sadot 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 Ralph Lauren with a short position of Sadot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ralph Lauren and Sadot.

Diversification Opportunities for Ralph Lauren and Sadot

-0.7

Correlation Coefficient

Ralph Lauren  Sadot

Excellent diversification

The 3 months correlation between Ralph and Sadot is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ralph Lauren Corp and Sadot Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sadot Group and Ralph Lauren 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 Ralph Lauren Corp are associated (or correlated) with Sadot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sadot Group has no effect on the direction of Ralph Lauren i.e., Ralph Lauren and Sadot go up and down completely randomly.

Pair Corralation between Ralph Lauren and Sadot

Allowing for the 90-day total investment horizon Ralph Lauren Corp is expected to generate 0.27 times more return on investment than Sadot. However, Ralph Lauren Corp is 3.76 times less risky than Sadot. It trades about 0.29 of its potential returns per unit of risk. Sadot Group is currently generating about 0.01 per unit of risk. If you would invest  21,182  in Ralph Lauren Corp on April 23, 2025 and sell it today you would earn a total of  7,694  from holding Ralph Lauren Corp or generate 36.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ralph Lauren Corp  vs.  Sadot Group

Ralph Lauren Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ralph Lauren Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Ralph Lauren disclosed solid returns over the last few months and may actually be approaching a breakup point.

Sadot Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sadot Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sadot 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 Ralph Lauren and Sadot

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

The idea behind Ralph Lauren Corp and Sadot 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.