Correlation Between Dollar General and Hf Foods
Can any of the company-specific risk be diversified away by investing in both Dollar General 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 Dollar General and Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Hf Foods Group, you can compare the effects of market volatilities on Dollar General 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 Dollar General with a short position of Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Hf Foods.
Diversification Opportunities for Dollar General and Hf Foods
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dollar and HFFG is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General 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 Dollar General 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 Dollar General 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 Dollar General i.e., Dollar General and Hf Foods go up and down completely randomly.
Pair Corralation between Dollar General and Hf Foods
Allowing for the 90-day total investment horizon Dollar General is expected to under-perform the Hf Foods. But the stock apears to be less risky and, when comparing its historical volatility, Dollar General is 1.54 times less risky than Hf Foods. The stock trades about -0.08 of its potential returns per unit of risk. The Hf Foods Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 404.00 in Hf Foods Group on August 30, 2024 and sell it today you would lose (43.00) from holding Hf Foods Group or give up 10.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dollar General vs. Hf Foods Group
Performance |
| Timeline |
| Dollar General |
| Hf Foods Group |
Dollar General and Hf Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and Hf Foods
The main advantage of trading using opposite Dollar General and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General 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.| Dollar General vs. BJs Wholesale Club | Dollar General vs. Costco Wholesale Corp | Dollar General vs. Walmart | Dollar General vs. Dollar Tree |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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