Correlation Between Fresh Del and Salvatore Ferragamo

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

By analyzing existing cross correlation between Fresh Del Monte and Salvatore Ferragamo SpA, you can compare the effects of market volatilities on Fresh Del and Salvatore Ferragamo 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 Fresh Del with a short position of Salvatore Ferragamo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Del and Salvatore Ferragamo.

Diversification Opportunities for Fresh Del and Salvatore Ferragamo

-0.8

Correlation Coefficient

Fresh Del  Salvatore Ferragamo

Pay attention - limited upside

The 3 months correlation between Fresh and Salvatore is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Salvatore Ferragamo SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salvatore Ferragamo SpA and Fresh Del 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 Fresh Del Monte are associated (or correlated) with Salvatore Ferragamo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salvatore Ferragamo SpA has no effect on the direction of Fresh Del i.e., Fresh Del and Salvatore Ferragamo go up and down completely randomly.

Pair Corralation between Fresh Del and Salvatore Ferragamo

Considering the 90-day investment horizon Fresh Del Monte is expected to generate 0.52 times more return on investment than Salvatore Ferragamo. However, Fresh Del Monte is 1.92 times less risky than Salvatore Ferragamo. It trades about 0.09 of its potential returns per unit of risk. Salvatore Ferragamo SpA is currently generating about -0.07 per unit of risk. If you would invest  2,419  in Fresh Del Monte on September 12, 2024 and sell it today you would earn a total of  948.00  from holding Fresh Del Monte or generate 39.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Fresh Del Monte  vs.  Salvatore Ferragamo SpA

Fresh Del Monte

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Del Monte are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Fresh Del reported solid returns over the last few months and may actually be approaching a breakup point.

Salvatore Ferragamo SpA

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fresh Del and Salvatore Ferragamo

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

The idea behind Fresh Del Monte and Salvatore Ferragamo SpA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.