Correlation Between Hf Foods and Wendys
Can any of the company-specific risk be diversified away by investing in both Hf Foods and Wendys 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 Wendys 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 The Wendys Co, you can compare the effects of market volatilities on Hf Foods and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Wendys.
Diversification Opportunities for Hf Foods and Wendys
Very weak diversification
The 3 months correlation between HFFG and Wendys is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Hf Foods i.e., Hf Foods and Wendys go up and down completely randomly.
Pair Corralation between Hf Foods and Wendys
Given the investment horizon of 90 days Hf Foods Group is expected to generate 0.77 times more return on investment than Wendys. However, Hf Foods Group is 1.3 times less risky than Wendys. It trades about -0.13 of its potential returns per unit of risk. The Wendys Co is currently generating about -0.1 per unit of risk. If you would invest 360.00 in Hf Foods Group on August 24, 2024 and sell it today you would lose (19.00) from holding Hf Foods Group or give up 5.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. The Wendys Co
Performance |
| Timeline |
| Hf Foods Group |
| The Wendys |
Hf Foods and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and Wendys
The main advantage of trading using opposite Hf Foods and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Hf Foods vs. Performance Food Group | Hf Foods vs. The Chefs Warehouse | Hf Foods vs. United Natural Foods | Hf Foods vs. Calavo Growers |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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