Correlation Between Hilton Food and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Hilton Food and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Bankers Investment.
Diversification Opportunities for Hilton Food and Bankers Investment
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Bankers is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Hilton Food i.e., Hilton Food and Bankers Investment go up and down completely randomly.
Pair Corralation between Hilton Food and Bankers Investment
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 1.81 times more return on investment than Bankers Investment. However, Hilton Food is 1.81 times more volatile than Bankers Investment Trust. It trades about 0.07 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.11 per unit of risk. If you would invest 71,938 in Hilton Food Group on September 3, 2024 and sell it today you would earn a total of 18,762 from holding Hilton Food Group or generate 26.08% 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. Bankers Investment Trust
Performance |
| Timeline |
| Hilton Food Group |
| Bankers Investment Trust |
Hilton Food and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Bankers Investment
The main advantage of trading using opposite Hilton Food and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Hilton Food vs. Austevoll Seafood ASA | Hilton Food vs. Sligro Food Group | Hilton Food vs. Tyson Foods Cl | Hilton Food vs. Summit Materials Cl |
| Bankers Investment vs. Verizon Communications | Bankers Investment vs. JD Sports Fashion | Bankers Investment vs. Silvercorp Metals | Bankers Investment vs. Gaztransport et Technigaz |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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