Correlation Between Hilton Food and MT Bank
Can any of the company-specific risk be diversified away by investing in both Hilton Food and MT Bank 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 Hilton Food and MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Food Group and MT Bank Corp, you can compare the effects of market volatilities on Hilton Food and MT Bank 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 Hilton Food with a short position of MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and MT Bank.
Diversification Opportunities for Hilton Food and MT Bank
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hilton and 0JW2 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp and Hilton Food 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 Hilton Food Group are associated (or correlated) with MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Hilton Food i.e., Hilton Food and MT Bank go up and down completely randomly.
Pair Corralation between Hilton Food and MT Bank
Assuming the 90 days trading horizon Hilton Food is expected to generate 1.9 times less return on investment than MT Bank. But when comparing it to its historical volatility, Hilton Food Group is 1.25 times less risky than MT Bank. It trades about 0.06 of its potential returns per unit of risk. MT Bank Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,474 in MT Bank Corp on September 19, 2024 and sell it today you would earn a total of 8,072 from holding MT Bank Corp or generate 70.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.71% |
| Values | Daily Returns |
Hilton Food Group vs. MT Bank Corp
Performance |
| Timeline |
| Hilton Food Group |
| MT Bank Corp |
Hilton Food and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and MT Bank
The main advantage of trading using opposite Hilton Food and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Hilton Food vs. Amedeo Air Four | Hilton Food vs. Monster Beverage Corp | Hilton Food vs. Finnair Oyj | Hilton Food vs. Sealed Air Corp |
| MT Bank vs. Team Internet Group | MT Bank vs. Empire Metals Limited | MT Bank vs. GreenX Metals | MT Bank vs. McEwen Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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