Correlation Between HF FOODS and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Gamma Communications 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 Gamma Communications 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 Gamma Communications plc, you can compare the effects of market volatilities on HF FOODS and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Gamma Communications.
Diversification Opportunities for HF FOODS and Gamma Communications
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3GX and Gamma is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Gamma Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications plc 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications plc has no effect on the direction of HF FOODS i.e., HF FOODS and Gamma Communications go up and down completely randomly.
Pair Corralation between HF FOODS and Gamma Communications
Assuming the 90 days horizon HF FOODS is expected to generate 2.46 times less return on investment than Gamma Communications. In addition to that, HF FOODS is 1.79 times more volatile than Gamma Communications plc. It trades about 0.01 of its total potential returns per unit of risk. Gamma Communications plc is currently generating about 0.05 per unit of volatility. If you would invest 1,262 in Gamma Communications plc on September 19, 2024 and sell it today you would earn a total of 718.00 from holding Gamma Communications plc or generate 56.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. Gamma Communications plc
Performance |
| Timeline |
| HF FOODS GRP |
| Gamma Communications plc |
HF FOODS and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Gamma Communications
The main advantage of trading using opposite HF FOODS and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| HF FOODS vs. Metro AG | HF FOODS vs. Superior Plus Corp | HF FOODS vs. SIVERS SEMICONDUCTORS AB | HF FOODS vs. NorAm Drilling AS |
| Gamma Communications vs. ELMOS SEMICONDUCTOR | Gamma Communications vs. HF FOODS GRP | Gamma Communications vs. Lery Seafood Group | Gamma Communications vs. Astral Foods Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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