Correlation Between HF FOODS and SOLENO THERAPEUT
Can any of the company-specific risk be diversified away by investing in both HF FOODS and SOLENO THERAPEUT 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 SOLENO THERAPEUT 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 SOLENO THERAPEUT DL 001, you can compare the effects of market volatilities on HF FOODS and SOLENO THERAPEUT 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 SOLENO THERAPEUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and SOLENO THERAPEUT.
Diversification Opportunities for HF FOODS and SOLENO THERAPEUT
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 3GX and SOLENO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and SOLENO THERAPEUT DL 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLENO THERAPEUT 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 SOLENO THERAPEUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLENO THERAPEUT has no effect on the direction of HF FOODS i.e., HF FOODS and SOLENO THERAPEUT go up and down completely randomly.
Pair Corralation between HF FOODS and SOLENO THERAPEUT
Assuming the 90 days horizon HF FOODS GRP is expected to generate 0.55 times more return on investment than SOLENO THERAPEUT. However, HF FOODS GRP is 1.81 times less risky than SOLENO THERAPEUT. It trades about 0.29 of its potential returns per unit of risk. SOLENO THERAPEUT DL 001 is currently generating about 0.03 per unit of risk. If you would invest 298.00 in HF FOODS GRP on September 4, 2024 and sell it today you would earn a total of 42.00 from holding HF FOODS GRP or generate 14.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
HF FOODS GRP vs. SOLENO THERAPEUT DL 001
Performance |
| Timeline |
| HF FOODS GRP |
| SOLENO THERAPEUT |
HF FOODS and SOLENO THERAPEUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and SOLENO THERAPEUT
The main advantage of trading using opposite HF FOODS and SOLENO THERAPEUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, SOLENO THERAPEUT 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 SOLENO THERAPEUT will offset losses from the drop in SOLENO THERAPEUT's long position.| HF FOODS vs. Performance Food Group | HF FOODS vs. Superior Plus Corp | HF FOODS vs. NMI Holdings | HF FOODS vs. Origin Agritech |
| SOLENO THERAPEUT vs. Park Hotels Resorts | SOLENO THERAPEUT vs. DALATA HOTEL | SOLENO THERAPEUT vs. GRIFFIN MINING LTD | SOLENO THERAPEUT vs. HYATT HOTELS A |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |