Correlation Between Hilton Food and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Hilton Food and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Sligro Food.
Diversification Opportunities for Hilton Food and Sligro Food
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hilton and Sligro is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Hilton Food i.e., Hilton Food and Sligro Food go up and down completely randomly.
Pair Corralation between Hilton Food and Sligro Food
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 0.97 times more return on investment than Sligro Food. However, Hilton Food Group is 1.03 times less risky than Sligro Food. It trades about 0.07 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.08 per unit of risk. If you would invest 74,446 in Hilton Food Group on August 29, 2024 and sell it today you would earn a total of 14,954 from holding Hilton Food Group or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Sligro Food Group
Performance |
| Timeline |
| Hilton Food Group |
| Sligro Food Group |
Hilton Food and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Sligro Food
The main advantage of trading using opposite Hilton Food and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Hilton Food vs. Samsung Electronics Co | Hilton Food vs. Samsung Electronics Co | Hilton Food vs. Toyota Motor Corp | Hilton Food vs. MOL Hungarian Oil |
| Sligro Food vs. Lendinvest PLC | Sligro Food vs. Neometals | Sligro Food vs. Coor Service Management | Sligro Food vs. Albion Technology General |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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