Correlation Between Hilton Food and Fevertree Drinks
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Fevertree Drinks 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 Fevertree Drinks 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 Fevertree Drinks Plc, you can compare the effects of market volatilities on Hilton Food and Fevertree Drinks 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 Fevertree Drinks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Fevertree Drinks.
Diversification Opportunities for Hilton Food and Fevertree Drinks
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilton and Fevertree is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Hilton Food i.e., Hilton Food and Fevertree Drinks go up and down completely randomly.
Pair Corralation between Hilton Food and Fevertree Drinks
Assuming the 90 days trading horizon Hilton Food Group is expected to generate 0.89 times more return on investment than Fevertree Drinks. However, Hilton Food Group is 1.13 times less risky than Fevertree Drinks. It trades about 0.07 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.11 per unit of risk. If you would invest 90,200 in Hilton Food Group on September 24, 2024 and sell it today you would earn a total of 1,400 from holding Hilton Food Group or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Fevertree Drinks Plc
Performance |
| Timeline |
| Hilton Food Group |
| Fevertree Drinks Plc |
Hilton Food and Fevertree Drinks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Fevertree Drinks
The main advantage of trading using opposite Hilton Food and Fevertree Drinks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Fevertree Drinks 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 Fevertree Drinks will offset losses from the drop in Fevertree Drinks' long position.| Hilton Food vs. Vitec Software Group | Hilton Food vs. iShares Physical Silver | Hilton Food vs. Axway Software SA | Hilton Food vs. Caledonia Mining |
| Fevertree Drinks vs. Roebuck Food Group | Fevertree Drinks vs. Austevoll Seafood ASA | Fevertree Drinks vs. Induction Healthcare Group | Fevertree Drinks vs. Hilton Food 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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