Correlation Between HF FOODS and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both HF FOODS and INFORMATION SVC 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 INFORMATION SVC 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 INFORMATION SVC GRP, you can compare the effects of market volatilities on HF FOODS and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and INFORMATION SVC.
Diversification Opportunities for HF FOODS and INFORMATION SVC
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 3GX and INFORMATION is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of HF FOODS i.e., HF FOODS and INFORMATION SVC go up and down completely randomly.
Pair Corralation between HF FOODS and INFORMATION SVC
Assuming the 90 days horizon HF FOODS GRP is expected to generate 1.73 times more return on investment than INFORMATION SVC. However, HF FOODS is 1.73 times more volatile than INFORMATION SVC GRP. It trades about 0.0 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about -0.02 per unit of risk. If you would invest 474.00 in HF FOODS GRP on September 12, 2024 and sell it today you would lose (114.00) from holding HF FOODS GRP or give up 24.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HF FOODS GRP vs. INFORMATION SVC GRP
Performance |
| Timeline |
| HF FOODS GRP |
| INFORMATION SVC GRP |
HF FOODS and INFORMATION SVC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and INFORMATION SVC
The main advantage of trading using opposite HF FOODS and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.| HF FOODS vs. INFORMATION SVC GRP | HF FOODS vs. Pure Storage | HF FOODS vs. DATAGROUP SE | HF FOODS vs. AXWAY SOFTWARE EO |
| INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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