Correlation Between HF FOODS and Food Life
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Food Life 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 Food Life 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 Food Life Companies, you can compare the effects of market volatilities on HF FOODS and Food Life 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 Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Food Life.
Diversification Opportunities for HF FOODS and Food Life
Very good diversification
The 3 months correlation between 3GX and Food is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies 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 Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of HF FOODS i.e., HF FOODS and Food Life go up and down completely randomly.
Pair Corralation between HF FOODS and Food Life
Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the Food Life. But the stock apears to be less risky and, when comparing its historical volatility, HF FOODS GRP is 1.45 times less risky than Food Life. The stock trades about -0.49 of its potential returns per unit of risk. The Food Life Companies is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 2,020 in Food Life Companies on November 27, 2024 and sell it today you would earn a total of 680.00 from holding Food Life Companies or generate 33.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. Food Life Companies
Performance |
| Timeline |
| HF FOODS GRP |
| Food Life Companies |
HF FOODS and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Food Life
The main advantage of trading using opposite HF FOODS and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| HF FOODS vs. Playtech plc | HF FOODS vs. Playa Hotels Resorts | HF FOODS vs. SLIGRO FOOD GROUP | HF FOODS vs. Nomad Foods |
| Food Life vs. Insurance Australia Group | Food Life vs. Japan Post Insurance | Food Life vs. Urban Outfitters | Food Life vs. ADRIATIC METALS LS 013355 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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