Correlation Between Cebu Air and Hf Foods
Can any of the company-specific risk be diversified away by investing in both Cebu Air 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 Cebu Air and Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and Hf Foods Group, you can compare the effects of market volatilities on Cebu Air 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 Cebu Air with a short position of Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Hf Foods.
Diversification Opportunities for Cebu Air and Hf Foods
Very good diversification
The 3 months correlation between Cebu and HFFG is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group and Cebu Air 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 Cebu Air ADR 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 Group has no effect on the direction of Cebu Air i.e., Cebu Air and Hf Foods go up and down completely randomly.
Pair Corralation between Cebu Air and Hf Foods
Assuming the 90 days horizon Cebu Air ADR is expected to generate 0.94 times more return on investment than Hf Foods. However, Cebu Air ADR is 1.06 times less risky than Hf Foods. It trades about 0.06 of its potential returns per unit of risk. Hf Foods Group is currently generating about 0.03 per unit of risk. If you would invest 150.00 in Cebu Air ADR on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Cebu Air ADR or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cebu Air ADR vs. Hf Foods Group
Performance |
| Timeline |
| Cebu Air ADR |
| Hf Foods Group |
Cebu Air and Hf Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Hf Foods
The main advantage of trading using opposite Cebu Air and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air 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' long position.| Cebu Air vs. Finnair Oyj | Cebu Air vs. easyJet plc | Cebu Air vs. Norse Atlantic ASA | Cebu Air vs. Air New Zealand |
| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. G Willi Food International | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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