Correlation Between Technicolor and Hilton Food
Can any of the company-specific risk be diversified away by investing in both Technicolor and Hilton Food 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 Technicolor and Hilton Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Technicolor and Hilton Food Group, you can compare the effects of market volatilities on Technicolor and Hilton Food 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 Technicolor with a short position of Hilton Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Technicolor and Hilton Food.
Diversification Opportunities for Technicolor and Hilton Food
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Technicolor and Hilton is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Technicolor and Hilton Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Food Group and Technicolor 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 Technicolor are associated (or correlated) with Hilton Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Food Group has no effect on the direction of Technicolor i.e., Technicolor and Hilton Food go up and down completely randomly.
Pair Corralation between Technicolor and Hilton Food
Assuming the 90 days trading horizon Technicolor is expected to generate 2.55 times more return on investment than Hilton Food. However, Technicolor is 2.55 times more volatile than Hilton Food Group. It trades about 0.04 of its potential returns per unit of risk. Hilton Food Group is currently generating about -0.02 per unit of risk. If you would invest 11.00 in Technicolor on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Technicolor or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Technicolor vs. Hilton Food Group
Performance |
| Timeline |
| Technicolor |
| Hilton Food Group |
Technicolor and Hilton Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Technicolor and Hilton Food
The main advantage of trading using opposite Technicolor and Hilton Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Technicolor position performs unexpectedly, Hilton Food 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 Hilton Food will offset losses from the drop in Hilton Food's long position.| Technicolor vs. Mobius Investment Trust | Technicolor vs. SoftBank Group Corp | Technicolor vs. Livermore Investments Group | Technicolor vs. Commerzbank AG |
| Hilton Food vs. Tungsten West PLC | Hilton Food vs. Argo Group Limited | Hilton Food vs. Hardide PLC | Hilton Food vs. Gfinity PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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