Correlation Between Victory New and Hunya Foods
Can any of the company-specific risk be diversified away by investing in both Victory New and Hunya Foods 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 Victory New and Hunya Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory New Materials and Hunya Foods Co, you can compare the effects of market volatilities on Victory New and Hunya Foods 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 Victory New with a short position of Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory New and Hunya Foods.
Diversification Opportunities for Victory New and Hunya Foods
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Victory and Hunya is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Victory New Materials and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods and Victory New 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 Victory New Materials are associated (or correlated) with Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Victory New i.e., Victory New and Hunya Foods go up and down completely randomly.
Pair Corralation between Victory New and Hunya Foods
Assuming the 90 days trading horizon Victory New Materials is expected to generate 1.95 times more return on investment than Hunya Foods. However, Victory New is 1.95 times more volatile than Hunya Foods Co. It trades about 0.0 of its potential returns per unit of risk. Hunya Foods Co is currently generating about -0.03 per unit of risk. If you would invest 1,020 in Victory New Materials on September 1, 2024 and sell it today you would lose (26.00) from holding Victory New Materials or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victory New Materials vs. Hunya Foods Co
Performance |
| Timeline |
| Victory New Materials |
| Hunya Foods |
Victory New and Hunya Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory New and Hunya Foods
The main advantage of trading using opposite Victory New and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory New position performs unexpectedly, Hunya Foods 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 Hunya Foods will offset losses from the drop in Hunya Foods' long position.| Victory New vs. Asia Plastic Recycling | Victory New vs. Hunya Foods Co | Victory New vs. Jinli Group Holdings | Victory New vs. Kwong Fong Industries |
| Hunya Foods vs. De Licacy Industrial | Hunya Foods vs. Wisher Industrial Co | Hunya Foods vs. Tainan Enterprises Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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