Correlation Between Hilton Food and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Hilton Food and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Litigation Capital.
Diversification Opportunities for Hilton Food and Litigation Capital
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hilton and Litigation is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Hilton Food i.e., Hilton Food and Litigation Capital go up and down completely randomly.
Pair Corralation between Hilton Food and Litigation Capital
Assuming the 90 days trading horizon Hilton Food Group is expected to under-perform the Litigation Capital. In addition to that, Hilton Food is 1.53 times more volatile than Litigation Capital Management. It trades about -0.04 of its total potential returns per unit of risk. Litigation Capital Management is currently generating about 0.18 per unit of volatility. If you would invest 11,200 in Litigation Capital Management on August 28, 2024 and sell it today you would earn a total of 375.00 from holding Litigation Capital Management or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Food Group vs. Litigation Capital Management
Performance |
| Timeline |
| Hilton Food Group |
| Litigation Capital |
Hilton Food and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Litigation Capital
The main advantage of trading using opposite Hilton Food and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Hilton Food vs. Ryanair Holdings plc | Hilton Food vs. Amedeo Air Four | Hilton Food vs. Zurich Insurance Group | Hilton Food vs. Air Products Chemicals |
| Litigation Capital vs. Bisichi Mining PLC | Litigation Capital vs. Porvair plc | Litigation Capital vs. Fair Oaks Income | Litigation Capital vs. Delta Air Lines |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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