Correlation Between Hf Foods and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Hf Foods and BBB 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 Hf Foods and BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on Hf Foods and BBB 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 Hf Foods with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and BBB Foods.
Diversification Opportunities for Hf Foods and BBB Foods
Very weak diversification
The 3 months correlation between HFFG and BBB is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Hf Foods i.e., Hf Foods and BBB Foods go up and down completely randomly.
Pair Corralation between Hf Foods and BBB Foods
Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the BBB Foods. But the stock apears to be less risky and, when comparing its historical volatility, Hf Foods Group is 1.05 times less risky than BBB Foods. The stock trades about -0.13 of its potential returns per unit of risk. The BBB Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,236 in BBB Foods on August 24, 2024 and sell it today you would earn a total of 104.00 from holding BBB Foods or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. BBB Foods
Performance |
| Timeline |
| Hf Foods Group |
| BBB Foods |
Hf Foods and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and BBB Foods
The main advantage of trading using opposite Hf Foods and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods position performs unexpectedly, BBB 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse | Hf Foods vs. AMCON Distributing |
| BBB Foods vs. Doubledown Interactive Co | BBB Foods vs. Golden Matrix Group | BBB Foods vs. Boyd Gaming | BBB Foods vs. Playstudios |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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