Correlation Between Hf Foods and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Hf Foods and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on Hf Foods and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and NETGEAR.
Diversification Opportunities for Hf Foods and NETGEAR
Poor diversification
The 3 months correlation between HFFG and NETGEAR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Hf Foods i.e., Hf Foods and NETGEAR go up and down completely randomly.
Pair Corralation between Hf Foods and NETGEAR
Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the NETGEAR. In addition to that, Hf Foods is 1.12 times more volatile than NETGEAR. It trades about -0.01 of its total potential returns per unit of risk. NETGEAR is currently generating about 0.06 per unit of volatility. If you would invest 1,446 in NETGEAR on September 12, 2024 and sell it today you would earn a total of 1,062 from holding NETGEAR or generate 73.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. NETGEAR
Performance |
| Timeline |
| Hf Foods Group |
| NETGEAR |
Hf Foods and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and NETGEAR
The main advantage of trading using opposite Hf Foods and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR'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 |
| NETGEAR vs. Hewlett Packard Enterprise | NETGEAR vs. Juniper Networks | NETGEAR vs. Ciena Corp | NETGEAR vs. Cisco Systems |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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