Correlation Between Sligro Food and Niagara Mohawk

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

Diversification Opportunities for Sligro Food and Niagara Mohawk

0.0

Correlation Coefficient

Sligro Food  Niagara Mohawk

Pay attention - limited upside

The 3 months correlation between Sligro and Niagara is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Sligro Food i.e., Sligro Food and Niagara Mohawk go up and down completely randomly.

Pair Corralation between Sligro Food and Niagara Mohawk

If you would invest  5,543  in Niagara Mohawk Power on April 7, 2024 and sell it today you would lose (1.00) from holding Niagara Mohawk Power or give up 0.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	82.93%
Values	Daily Returns

Sligro Food Group  vs.  Niagara Mohawk Power

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 nearly stable basic indicators, Sligro Food is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Niagara Mohawk Power

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Niagara Mohawk Power are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Niagara Mohawk is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sligro Food and Niagara Mohawk

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

The idea behind Sligro Food Group and Niagara Mohawk Power 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.