Correlation Between Diversey Holdings and Goodfood Market

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

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

Diversification Opportunities for Diversey Holdings and Goodfood Market

0.0

Correlation Coefficient

Diversey Holdings  Goodfood Market

Pay attention - limited upside

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

Pair Corralation between Diversey Holdings and Goodfood Market

If you would invest (100.00) in Goodfood Market Corp on September 3, 2024 and sell it today you would earn a total of  100.00  from holding Goodfood Market Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Diversey Holdings  vs.  Goodfood Market Corp

Diversey Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Goodfood Market Corp

Risk-Adjusted Performance

0 of 100

Good

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

Pair Trading with Diversey Holdings and Goodfood Market

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

The idea behind Diversey Holdings and Goodfood Market Corp 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.