Correlation Between Eastern and Hf Foods
Can any of the company-specific risk be diversified away by investing in both Eastern 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 Eastern and Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Co and Hf Foods Group, you can compare the effects of market volatilities on Eastern 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 Eastern with a short position of Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern and Hf Foods.
Diversification Opportunities for Eastern and Hf Foods
Good diversification
The 3 months correlation between Eastern and HFFG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Co 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 Eastern 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 Eastern Co 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 Eastern i.e., Eastern and Hf Foods go up and down completely randomly.
Pair Corralation between Eastern and Hf Foods
Considering the 90-day investment horizon Eastern is expected to generate 1.27 times less return on investment than Hf Foods. But when comparing it to its historical volatility, Eastern Co is 1.55 times less risky than Hf Foods. It trades about 0.04 of its potential returns per unit of risk. Hf Foods Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 355.00 in Hf Foods Group on September 3, 2024 and sell it today you would earn a total of 15.00 from holding Hf Foods Group or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Co vs. Hf Foods Group
Performance |
| Timeline |
| Eastern |
| Hf Foods Group |
Eastern and Hf Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern and Hf Foods
The main advantage of trading using opposite Eastern and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern 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.The idea behind Eastern Co and Hf Foods Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |