Correlation Between Hilton Food and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Beeks Trading 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 Beeks Trading 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 Beeks Trading, you can compare the effects of market volatilities on Hilton Food and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Beeks Trading.
Diversification Opportunities for Hilton Food and Beeks Trading
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hilton and Beeks is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of Hilton Food i.e., Hilton Food and Beeks Trading go up and down completely randomly.
Pair Corralation between Hilton Food and Beeks Trading
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 0.57 times more return on investment than Beeks Trading. However, Hilton Food Group is 1.75 times less risky than Beeks Trading. It trades about -0.13 of its potential returns per unit of risk. Beeks Trading is currently generating about -0.08 per unit of risk. If you would invest 89,500 in Hilton Food Group on October 26, 2024 and sell it today you would lose (3,200) from holding Hilton Food Group or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Beeks Trading
Performance |
| Timeline |
| Hilton Food Group |
| Beeks Trading |
Hilton Food and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Beeks Trading
The main advantage of trading using opposite Hilton Food and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| Hilton Food vs. Beeks Trading | Hilton Food vs. Universal Display Corp | Hilton Food vs. Air Products Chemicals | Hilton Food vs. Bankers Investment Trust |
| Beeks Trading vs. Fevertree Drinks Plc | Beeks Trading vs. Monster Beverage Corp | Beeks Trading vs. United Internet AG | Beeks Trading vs. Gamma Communications PLC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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