Correlation Between Sligro Food and Top KingWin

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

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

Diversification Opportunities for Sligro Food and Top KingWin

0.56

Correlation Coefficient

Sligro Food  Top KingWin

Very weak diversification

The 3 months correlation between Sligro and Top is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Top KingWin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin and Sligro Food 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 Sligro Food Group are associated (or correlated) with Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Sligro Food i.e., Sligro Food and Top KingWin go up and down completely randomly.

Pair Corralation between Sligro Food and Top KingWin

Assuming the 90 days horizon Sligro Food Group is expected to under-perform the Top KingWin. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 8.12 times less risky than Top KingWin. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Top KingWin is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Top KingWin on September 12, 2024 and sell it today you would lose (11.50) from holding Top KingWin or give up 23.0% of portfolio value over 90 days.

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

Sligro Food Group  vs.  Top KingWin

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 uncertain 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.

Top KingWin

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Top KingWin are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Top KingWin demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sligro Food and Top KingWin

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

The idea behind Sligro Food Group and Top KingWin 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.