Correlation Between Hf Foods and Deluxe
Can any of the company-specific risk be diversified away by investing in both Hf Foods and Deluxe 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 Hf Foods and Deluxe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hf Foods Group and Deluxe, you can compare the effects of market volatilities on Hf Foods and Deluxe 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 Hf Foods with a short position of Deluxe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Deluxe.
Diversification Opportunities for Hf Foods and Deluxe
Weak diversification
The 3 months correlation between HFFG and Deluxe is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Deluxe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deluxe and Hf Foods 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 Hf Foods Group are associated (or correlated) with Deluxe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deluxe has no effect on the direction of Hf Foods i.e., Hf Foods and Deluxe go up and down completely randomly.
Pair Corralation between Hf Foods and Deluxe
Given the investment horizon of 90 days Hf Foods is expected to generate 1.85 times less return on investment than Deluxe. In addition to that, Hf Foods is 1.64 times more volatile than Deluxe. It trades about 0.02 of its total potential returns per unit of risk. Deluxe is currently generating about 0.05 per unit of volatility. If you would invest 1,556 in Deluxe on September 3, 2024 and sell it today you would earn a total of 761.00 from holding Deluxe or generate 48.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. Deluxe
Performance |
| Timeline |
| Hf Foods Group |
| Deluxe |
Hf Foods and Deluxe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and Deluxe
The main advantage of trading using opposite Hf Foods and Deluxe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods position performs unexpectedly, Deluxe 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 Deluxe will offset losses from the drop in Deluxe's long position.| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. G Willi Food International | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse |
| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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