Correlation Between Rabbit Holdings and President Bakery
Can any of the company-specific risk be diversified away by investing in both Rabbit Holdings and President Bakery 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 Rabbit Holdings and President Bakery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rabbit Holdings PCL and President Bakery Public, you can compare the effects of market volatilities on Rabbit Holdings and President Bakery 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 Rabbit Holdings with a short position of President Bakery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rabbit Holdings and President Bakery.
Diversification Opportunities for Rabbit Holdings and President Bakery
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Rabbit and President is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Rabbit Holdings PCL and President Bakery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Bakery Public and Rabbit 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 Rabbit Holdings PCL are associated (or correlated) with President Bakery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Bakery Public has no effect on the direction of Rabbit Holdings i.e., Rabbit Holdings and President Bakery go up and down completely randomly.
Pair Corralation between Rabbit Holdings and President Bakery
Assuming the 90 days trading horizon Rabbit Holdings PCL is expected to under-perform the President Bakery. In addition to that, Rabbit Holdings is 3.44 times more volatile than President Bakery Public. It trades about -0.16 of its total potential returns per unit of risk. President Bakery Public is currently generating about 0.0 per unit of volatility. If you would invest 6,000 in President Bakery Public on September 26, 2024 and sell it today you would lose (25.00) from holding President Bakery Public or give up 0.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Rabbit Holdings PCL vs. President Bakery Public
Performance |
Timeline |
Rabbit Holdings PCL |
President Bakery Public |
Rabbit Holdings and President Bakery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rabbit Holdings and President Bakery
The main advantage of trading using opposite Rabbit Holdings and President Bakery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rabbit Holdings position performs unexpectedly, President Bakery 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 President Bakery will offset losses from the drop in President Bakery's long position.Rabbit Holdings vs. VGI Public | Rabbit Holdings vs. CH Karnchang Public | Rabbit Holdings vs. SG Capital PCL | Rabbit Holdings vs. i Tail Corp PCL |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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