Correlation Between HF FOODS and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on HF FOODS and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Universal Entertainment.
Diversification Opportunities for HF FOODS and Universal Entertainment
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 3GX and Universal is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of HF FOODS i.e., HF FOODS and Universal Entertainment go up and down completely randomly.
Pair Corralation between HF FOODS and Universal Entertainment
Assuming the 90 days horizon HF FOODS GRP is expected to generate 0.44 times more return on investment than Universal Entertainment. However, HF FOODS GRP is 2.26 times less risky than Universal Entertainment. It trades about 0.25 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.11 per unit of risk. If you would invest 324.00 in HF FOODS GRP on September 14, 2024 and sell it today you would earn a total of 44.00 from holding HF FOODS GRP or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. Universal Entertainment
Performance |
| Timeline |
| HF FOODS GRP |
| Universal Entertainment |
HF FOODS and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Universal Entertainment
The main advantage of trading using opposite HF FOODS and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's 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 |
| Universal Entertainment vs. HF FOODS GRP | Universal Entertainment vs. NetSol Technologies | Universal Entertainment vs. Charoen Pokphand Foods | Universal Entertainment vs. SOFI TECHNOLOGIES |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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