Correlation Between HF FOODS and AUSNUTRIA DAIRY
Can any of the company-specific risk be diversified away by investing in both HF FOODS and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY, you can compare the effects of market volatilities on HF FOODS and AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and AUSNUTRIA DAIRY.
Diversification Opportunities for HF FOODS and AUSNUTRIA DAIRY
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3GX and AUSNUTRIA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and AUSNUTRIA DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUSNUTRIA DAIRY has no effect on the direction of HF FOODS i.e., HF FOODS and AUSNUTRIA DAIRY go up and down completely randomly.
Pair Corralation between HF FOODS and AUSNUTRIA DAIRY
Assuming the 90 days horizon HF FOODS GRP is expected to generate 0.73 times more return on investment than AUSNUTRIA DAIRY. However, HF FOODS GRP is 1.36 times less risky than AUSNUTRIA DAIRY. It trades about -0.12 of its potential returns per unit of risk. AUSNUTRIA DAIRY is currently generating about -0.14 per unit of risk. If you would invest 344.00 in HF FOODS GRP on September 24, 2024 and sell it today you would lose (26.00) from holding HF FOODS GRP or give up 7.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. AUSNUTRIA DAIRY
Performance |
| Timeline |
| HF FOODS GRP |
| AUSNUTRIA DAIRY |
HF FOODS and AUSNUTRIA DAIRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and AUSNUTRIA DAIRY
The main advantage of trading using opposite HF FOODS and AUSNUTRIA DAIRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, AUSNUTRIA DAIRY 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 AUSNUTRIA DAIRY will offset losses from the drop in AUSNUTRIA DAIRY's long position.| HF FOODS vs. Sysco | HF FOODS vs. Jernimo Martins SGPS | HF FOODS vs. JERONIMO MARTINS UNADR2 | HF FOODS vs. Performance Food Group |
| AUSNUTRIA DAIRY vs. Apple Inc | AUSNUTRIA DAIRY vs. Apple Inc | AUSNUTRIA DAIRY vs. Apple Inc | AUSNUTRIA DAIRY vs. Microsoft |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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