Correlation Between Sligro Food and BS Group

Can any of the company-specific risk be diversified away by investing in both Sligro Food and BS Group 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 BS Group 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 BS Group SA, you can compare the effects of market volatilities on Sligro Food and BS Group 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 BS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and BS Group.

Diversification Opportunities for Sligro Food and BS Group

0.8

Correlation Coefficient

Sligro Food  BS Group

Very poor diversification

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

Pair Corralation between Sligro Food and BS Group

Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the BS Group. But the stock apears to be less risky and, when comparing its historical volatility, Sligro Food Group is 3.83 times less risky than BS Group. The stock trades about -0.21 of its potential returns per unit of risk. The BS Group SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  422.00  in BS Group SA on September 19, 2024 and sell it today you would earn a total of  10.00  from holding BS Group SA or generate 2.37% return on investment over 90 days.

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

Sligro Food Group  vs.  BS Group SA

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BS Group SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BS Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sligro Food and BS Group

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

The idea behind Sligro Food Group and BS Group SA 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.