Correlation Between Metro AG and HF FOODS
Can any of the company-specific risk be diversified away by investing in both Metro AG and HF FOODS 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 Metro AG and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro AG and HF FOODS GRP, you can compare the effects of market volatilities on Metro AG and HF FOODS 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 Metro AG with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro AG and HF FOODS.
Diversification Opportunities for Metro AG and HF FOODS
Good diversification
The 3 months correlation between Metro and 3GX is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Metro AG and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP and Metro AG 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 Metro AG are associated (or correlated) with HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of Metro AG i.e., Metro AG and HF FOODS go up and down completely randomly.
Pair Corralation between Metro AG and HF FOODS
Assuming the 90 days trading horizon Metro AG is expected to generate 0.97 times more return on investment than HF FOODS. However, Metro AG is 1.03 times less risky than HF FOODS. It trades about 0.01 of its potential returns per unit of risk. HF FOODS GRP is currently generating about 0.01 per unit of risk. If you would invest 541.00 in Metro AG on September 14, 2024 and sell it today you would lose (26.00) from holding Metro AG or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro AG vs. HF FOODS GRP
Performance |
| Timeline |
| Metro AG |
| HF FOODS GRP |
Metro AG and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro AG and HF FOODS
The main advantage of trading using opposite Metro AG and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro AG position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| Metro AG vs. DIVERSIFIED ROYALTY | Metro AG vs. Verizon Communications | Metro AG vs. REINET INVESTMENTS SCA | Metro AG vs. Consolidated Communications Holdings |
| HF FOODS vs. Metro AG | HF FOODS vs. Superior Plus Corp | HF FOODS vs. SIVERS SEMICONDUCTORS AB | HF FOODS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |