Correlation Between Air New and HF FOODS
Can any of the company-specific risk be diversified away by investing in both Air New 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 Air New and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and HF FOODS GRP, you can compare the effects of market volatilities on Air New 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 Air New with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and HF FOODS.
Diversification Opportunities for Air New and HF FOODS
Good diversification
The 3 months correlation between Air and 3GX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand 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 Air New 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 Air New Zealand 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 Air New i.e., Air New and HF FOODS go up and down completely randomly.
Pair Corralation between Air New and HF FOODS
Assuming the 90 days trading horizon Air New Zealand is expected to generate 0.95 times more return on investment than HF FOODS. However, Air New Zealand is 1.05 times less risky than HF FOODS. It trades about 0.08 of its potential returns per unit of risk. HF FOODS GRP is currently generating about -0.27 per unit of risk. If you would invest 32.00 in Air New Zealand on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Air New Zealand or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. HF FOODS GRP
Performance |
| Timeline |
| Air New Zealand |
| HF FOODS GRP |
Air New and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and HF FOODS
The main advantage of trading using opposite Air New and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New 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.| Air New vs. Nok Airlines PCL | Air New vs. VELA TECHNOLPLC LS 0001 | Air New vs. SINGAPORE AIRLINES | Air New vs. Minerals Technologies |
| HF FOODS vs. FAIR ISAAC | HF FOODS vs. AGNC INVESTMENT | HF FOODS vs. Wizz Air Holdings | HF FOODS vs. SEALED AIR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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