Correlation Between Four Seasons and Sligro Food

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

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

Diversification Opportunities for Four Seasons and Sligro Food

0.74

Correlation Coefficient

Four Seasons  Sligro Food

Poor diversification

The 3 months correlation between Four and Sligro is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Four Seasons Education and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group and Four Seasons 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 Four Seasons Education are associated (or correlated) with Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Four Seasons i.e., Four Seasons and Sligro Food go up and down completely randomly.

Pair Corralation between Four Seasons and Sligro Food

Given the investment horizon of 90 days Four Seasons Education is expected to under-perform the Sligro Food. In addition to that, Four Seasons is 1.74 times more volatile than Sligro Food Group. It trades about -0.09 of its total potential returns per unit of risk. Sligro Food Group is currently generating about -0.13 per unit of volatility. If you would invest  1,366  in Sligro Food Group on September 27, 2024 and sell it today you would lose (166.00) from holding Sligro Food Group or give up 12.15% of portfolio value over 90 days.

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

Four Seasons Education  vs.  Sligro Food Group

Four Seasons Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Four Seasons Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Four Seasons and Sligro Food

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

The idea behind Four Seasons Education and Sligro Food 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.