Correlation Between HF FOODS and Powercell Sweden
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Powercell Sweden 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 Powercell Sweden 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 Powercell Sweden, you can compare the effects of market volatilities on HF FOODS and Powercell Sweden 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 Powercell Sweden. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Powercell Sweden.
Diversification Opportunities for HF FOODS and Powercell Sweden
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 3GX and Powercell is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Powercell Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powercell Sweden 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 Powercell Sweden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powercell Sweden has no effect on the direction of HF FOODS i.e., HF FOODS and Powercell Sweden go up and down completely randomly.
Pair Corralation between HF FOODS and Powercell Sweden
Assuming the 90 days horizon HF FOODS GRP is expected to generate 0.43 times more return on investment than Powercell Sweden. However, HF FOODS GRP is 2.31 times less risky than Powercell Sweden. It trades about 0.13 of its potential returns per unit of risk. Powercell Sweden is currently generating about -0.09 per unit of risk. If you would invest 302.00 in HF FOODS GRP on August 29, 2024 and sell it today you would earn a total of 40.00 from holding HF FOODS GRP or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. Powercell Sweden
Performance |
| Timeline |
| HF FOODS GRP |
| Powercell Sweden |
HF FOODS and Powercell Sweden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Powercell Sweden
The main advantage of trading using opposite HF FOODS and Powercell Sweden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Powercell Sweden 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 Powercell Sweden will offset losses from the drop in Powercell Sweden's long position.| HF FOODS vs. Superior Plus Corp | HF FOODS vs. SIVERS SEMICONDUCTORS AB | HF FOODS vs. Talanx AG | HF FOODS vs. 2G ENERGY |
| Powercell Sweden vs. Motorcar Parts of | Powercell Sweden vs. INDOFOOD AGRI RES | Powercell Sweden vs. HF FOODS GRP | Powercell Sweden vs. PT Indofood Sukses |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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