Correlation Between HF FOODS and Volkswagen
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Volkswagen 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 Volkswagen 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 Volkswagen AG, you can compare the effects of market volatilities on HF FOODS and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Volkswagen.
Diversification Opportunities for HF FOODS and Volkswagen
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 3GX and Volkswagen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of HF FOODS i.e., HF FOODS and Volkswagen go up and down completely randomly.
Pair Corralation between HF FOODS and Volkswagen
Assuming the 90 days horizon HF FOODS GRP is expected to generate 1.89 times more return on investment than Volkswagen. However, HF FOODS is 1.89 times more volatile than Volkswagen AG. It trades about 0.27 of its potential returns per unit of risk. Volkswagen AG is currently generating about 0.12 per unit of risk. If you would invest 320.00 in HF FOODS GRP on September 13, 2024 and sell it today you would earn a total of 48.00 from holding HF FOODS GRP or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. Volkswagen AG
Performance |
| Timeline |
| HF FOODS GRP |
| Volkswagen AG |
HF FOODS and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and Volkswagen
The main advantage of trading using opposite HF FOODS and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen'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 |
| Volkswagen vs. ScanSource | Volkswagen vs. SCANSOURCE | Volkswagen vs. Goosehead Insurance | Volkswagen vs. United Breweries Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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