Correlation Between Hilton Food and Technicolor
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Technicolor 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 Technicolor 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 Technicolor, you can compare the effects of market volatilities on Hilton Food and Technicolor 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 Technicolor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Technicolor.
Diversification Opportunities for Hilton Food and Technicolor
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Technicolor is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Technicolor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technicolor 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 Technicolor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technicolor has no effect on the direction of Hilton Food i.e., Hilton Food and Technicolor go up and down completely randomly.
Pair Corralation between Hilton Food and Technicolor
Assuming the 90 days trading horizon Hilton Food Group is expected to under-perform the Technicolor. But the stock apears to be less risky and, when comparing its historical volatility, Hilton Food Group is 2.48 times less risky than Technicolor. The stock trades about 0.0 of its potential returns per unit of risk. The Technicolor is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Technicolor on October 10, 2024 and sell it today you would earn a total of 1.00 from holding Technicolor or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Technicolor
Performance |
| Timeline |
| Hilton Food Group |
| Technicolor |
Hilton Food and Technicolor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Technicolor
The main advantage of trading using opposite Hilton Food and Technicolor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Technicolor 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 Technicolor will offset losses from the drop in Technicolor's long position.| Hilton Food vs. Broadcom | Hilton Food vs. Check Point Software | Hilton Food vs. Cardinal Health | Hilton Food vs. Inspiration Healthcare Group |
| Technicolor vs. Creo Medical Group | Technicolor vs. Panther Metals PLC | Technicolor vs. Rheinmetall AG | Technicolor vs. Wheaton Precious Metals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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