Correlation Between TYSON FOODS and Prosus NV

Can any of the company-specific risk be diversified away by investing in both TYSON FOODS and Prosus NV 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 TYSON FOODS and Prosus NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TYSON FOODS A and Prosus NV, you can compare the effects of market volatilities on TYSON FOODS and Prosus NV 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 TYSON FOODS with a short position of Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of TYSON FOODS and Prosus NV.

Diversification Opportunities for TYSON FOODS and Prosus NV

0.01

Correlation Coefficient

TYSON FOODS  Prosus NV

Significant diversification

The 3 months correlation between TYSON and Prosus is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding TYSON FOODS A and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV and TYSON FOODS 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 TYSON FOODS A are associated (or correlated) with Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of TYSON FOODS i.e., TYSON FOODS and Prosus NV go up and down completely randomly.

Pair Corralation between TYSON FOODS and Prosus NV

Assuming the 90 days trading horizon TYSON FOODS is expected to generate 3.5 times less return on investment than Prosus NV. But when comparing it to its historical volatility, TYSON FOODS A is 1.17 times less risky than Prosus NV. It trades about 0.07 of its potential returns per unit of risk. Prosus NV is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  3,202  in Prosus NV on September 12, 2024 and sell it today you would earn a total of  842.00  from holding Prosus NV or generate 26.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

TYSON FOODS A   vs.  Prosus NV

TYSON FOODS A

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TYSON FOODS A are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, TYSON FOODS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Prosus NV

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prosus NV are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Prosus NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TYSON FOODS and Prosus NV

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

The idea behind TYSON FOODS A and Prosus NV 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.