Correlation Between HF FOODS and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Gladstone Investment 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 HF FOODS and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF FOODS GRP and Gladstone Investment, you can compare the effects of market volatilities on HF FOODS and Gladstone Investment 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 HF FOODS with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Gladstone Investment.
Diversification Opportunities for HF FOODS and Gladstone Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3GX and Gladstone is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and HF 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 HF FOODS GRP are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of HF FOODS i.e., HF FOODS and Gladstone Investment go up and down completely randomly.
Pair Corralation between HF FOODS and Gladstone Investment
Assuming the 90 days horizon HF FOODS GRP is expected to generate 2.46 times more return on investment than Gladstone Investment. However, HF FOODS is 2.46 times more volatile than Gladstone Investment. It trades about 0.04 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of risk. If you would invest 304.00 in HF FOODS GRP on September 1, 2024 and sell it today you would earn a total of 36.00 from holding HF FOODS GRP or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
HF FOODS GRP vs. Gladstone Investment
Performance |
| Timeline |
| HF FOODS GRP |
| Gladstone Investment |
HF FOODS and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Gladstone Investment
The main advantage of trading using opposite HF FOODS and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| HF FOODS vs. Playtech plc | HF FOODS vs. Perdoceo Education | HF FOODS vs. DeVry Education Group | HF FOODS vs. Xinhua Winshare Publishing |
| Gladstone Investment vs. MINCO SILVER | Gladstone Investment vs. Perdoceo Education | Gladstone Investment vs. Grand Canyon Education | Gladstone Investment vs. RYU Apparel |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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