Correlation Between Hilton Food and Aptitude Software
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Aptitude Software 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 Aptitude Software 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 Aptitude Software Group, you can compare the effects of market volatilities on Hilton Food and Aptitude Software 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 Aptitude Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Aptitude Software.
Diversification Opportunities for Hilton Food and Aptitude Software
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Aptitude is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Aptitude Software Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptitude Software 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 Aptitude Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptitude Software has no effect on the direction of Hilton Food i.e., Hilton Food and Aptitude Software go up and down completely randomly.
Pair Corralation between Hilton Food and Aptitude Software
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 0.78 times more return on investment than Aptitude Software. However, Hilton Food Group is 1.29 times less risky than Aptitude Software. It trades about -0.02 of its potential returns per unit of risk. Aptitude Software Group is currently generating about -0.07 per unit of risk. If you would invest 90,539 in Hilton Food Group on October 25, 2024 and sell it today you would lose (4,339) from holding Hilton Food Group or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Aptitude Software Group
Performance |
| Timeline |
| Hilton Food Group |
| Aptitude Software |
Hilton Food and Aptitude Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Aptitude Software
The main advantage of trading using opposite Hilton Food and Aptitude Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Aptitude Software 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 Aptitude Software will offset losses from the drop in Aptitude Software's long position.| Hilton Food vs. Tungsten West PLC | Hilton Food vs. Argo Group Limited | Hilton Food vs. Hardide PLC | Hilton Food vs. Gfinity PLC |
| Aptitude Software vs. Cairo Communication SpA | Aptitude Software vs. Zoom Video Communications | Aptitude Software vs. MediaZest plc | Aptitude Software vs. Mobile Tornado Group |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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