Correlation Between Hilton Food and Naturhouse Health
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Naturhouse Health 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 Naturhouse Health 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 Naturhouse Health SA, you can compare the effects of market volatilities on Hilton Food and Naturhouse Health 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 Naturhouse Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Naturhouse Health.
Diversification Opportunities for Hilton Food and Naturhouse Health
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hilton and Naturhouse is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Hilton Food i.e., Hilton Food and Naturhouse Health go up and down completely randomly.
Pair Corralation between Hilton Food and Naturhouse Health
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 2.0 times more return on investment than Naturhouse Health. However, Hilton Food is 2.0 times more volatile than Naturhouse Health SA. It trades about 0.04 of its potential returns per unit of risk. Naturhouse Health SA is currently generating about -0.08 per unit of risk. If you would invest 91,600 in Hilton Food Group on September 21, 2024 and sell it today you would earn a total of 800.00 from holding Hilton Food Group or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Naturhouse Health SA
Performance |
| Timeline |
| Hilton Food Group |
| Naturhouse Health |
Hilton Food and Naturhouse Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Naturhouse Health
The main advantage of trading using opposite Hilton Food and Naturhouse Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Naturhouse Health 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 Naturhouse Health will offset losses from the drop in Naturhouse Health's long position.| Hilton Food vs. Samsung Electronics Co | Hilton Food vs. Samsung Electronics Co | Hilton Food vs. Hyundai Motor | Hilton Food vs. Toyota Motor Corp |
| Naturhouse Health vs. Samsung Electronics Co | Naturhouse Health vs. Samsung Electronics Co | Naturhouse Health vs. Hyundai Motor | Naturhouse Health vs. Reliance Industries Ltd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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