Correlation Between HF FOODS and Dolly Varden
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Dolly Varden 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 Dolly Varden 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 Dolly Varden Silver, you can compare the effects of market volatilities on HF FOODS and Dolly Varden 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 Dolly Varden. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Dolly Varden.
Diversification Opportunities for HF FOODS and Dolly Varden
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3GX and Dolly is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Dolly Varden Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolly Varden Silver 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 Dolly Varden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolly Varden Silver has no effect on the direction of HF FOODS i.e., HF FOODS and Dolly Varden go up and down completely randomly.
Pair Corralation between HF FOODS and Dolly Varden
Assuming the 90 days horizon HF FOODS is expected to generate 4.3 times less return on investment than Dolly Varden. But when comparing it to its historical volatility, HF FOODS GRP is 1.45 times less risky than Dolly Varden. It trades about 0.01 of its potential returns per unit of risk. Dolly Varden Silver is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 61.00 in Dolly Varden Silver on September 24, 2024 and sell it today you would lose (2.00) from holding Dolly Varden Silver or give up 3.28% 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. Dolly Varden Silver
Performance |
| Timeline |
| HF FOODS GRP |
| Dolly Varden Silver |
HF FOODS and Dolly Varden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Dolly Varden
The main advantage of trading using opposite HF FOODS and Dolly Varden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Dolly Varden 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 Dolly Varden will offset losses from the drop in Dolly Varden'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 |
| Dolly Varden vs. National Beverage Corp | Dolly Varden vs. Yuexiu Transport Infrastructure | Dolly Varden vs. PT Indofood Sukses | Dolly Varden vs. HF FOODS GRP |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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