Correlation Between HF FOODS and Nike
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Nike 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 Nike 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 Nike Inc, you can compare the effects of market volatilities on HF FOODS and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Nike.
Diversification Opportunities for HF FOODS and Nike
Good diversification
The 3 months correlation between 3GX and Nike is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of HF FOODS i.e., HF FOODS and Nike go up and down completely randomly.
Pair Corralation between HF FOODS and Nike
Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the Nike. In addition to that, HF FOODS is 1.9 times more volatile than Nike Inc. It trades about -0.02 of its total potential returns per unit of risk. Nike Inc is currently generating about 0.14 per unit of volatility. If you would invest 7,130 in Nike Inc on September 22, 2024 and sell it today you would earn a total of 322.00 from holding Nike Inc or generate 4.52% 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. Nike Inc
Performance |
| Timeline |
| HF FOODS GRP |
| Nike Inc |
HF FOODS and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Nike
The main advantage of trading using opposite HF FOODS and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike'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 |
| Nike vs. ACCSYS TECHPLC EO | Nike vs. Digilife Technologies Limited | Nike vs. SOFI TECHNOLOGIES | Nike 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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