Correlation Between HF FOODS and American States
Can any of the company-specific risk be diversified away by investing in both HF FOODS and American States 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 American States 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 American States Water, you can compare the effects of market volatilities on HF FOODS and American States 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 American States. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and American States.
Diversification Opportunities for HF FOODS and American States
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 3GX and American is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and American States Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American States Water 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 American States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American States Water has no effect on the direction of HF FOODS i.e., HF FOODS and American States go up and down completely randomly.
Pair Corralation between HF FOODS and American States
Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the American States. In addition to that, HF FOODS is 2.18 times more volatile than American States Water. It trades about -0.28 of its total potential returns per unit of risk. American States Water is currently generating about -0.19 per unit of volatility. If you would invest 7,740 in American States Water on October 7, 2024 and sell it today you would lose (315.00) from holding American States Water or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. American States Water
Performance |
| Timeline |
| HF FOODS GRP |
| American States Water |
HF FOODS and American States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and American States
The main advantage of trading using opposite HF FOODS and American States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, American States 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 American States will offset losses from the drop in American States' long position.| HF FOODS vs. SPARTAN STORES | HF FOODS vs. MagnaChip Semiconductor Corp | HF FOODS vs. Ross Stores | HF FOODS vs. Caseys General Stores |
| American States vs. INDO RAMA SYNTHETIC | American States vs. Commercial Vehicle Group | American States vs. United Airlines Holdings | American States vs. NorAm Drilling AS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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