Correlation Between Hilton Food and Zanaga Iron
Can any of the company-specific risk be diversified away by investing in both Hilton Food and Zanaga Iron 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 Zanaga Iron 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 Zanaga Iron Ore, you can compare the effects of market volatilities on Hilton Food and Zanaga Iron 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 Zanaga Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Food and Zanaga Iron.
Diversification Opportunities for Hilton Food and Zanaga Iron
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hilton and Zanaga is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and Zanaga Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zanaga Iron Ore 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 Zanaga Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zanaga Iron Ore has no effect on the direction of Hilton Food i.e., Hilton Food and Zanaga Iron go up and down completely randomly.
Pair Corralation between Hilton Food and Zanaga Iron
Assuming the 90 days trading horizon Hilton Food is expected to generate 1.11 times less return on investment than Zanaga Iron. But when comparing it to its historical volatility, Hilton Food Group is 3.92 times less risky than Zanaga Iron. It trades about 0.09 of its potential returns per unit of risk. Zanaga Iron Ore is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 463.00 in Zanaga Iron Ore on August 29, 2024 and sell it today you would lose (67.00) from holding Zanaga Iron Ore or give up 14.47% 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. Zanaga Iron Ore
Performance |
| Timeline |
| Hilton Food Group |
| Zanaga Iron Ore |
Hilton Food and Zanaga Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Food and Zanaga Iron
The main advantage of trading using opposite Hilton Food and Zanaga Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Food position performs unexpectedly, Zanaga Iron 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 Zanaga Iron will offset losses from the drop in Zanaga Iron's long position.| Hilton Food vs. Samsung Electronics Co | Hilton Food vs. Samsung Electronics Co | Hilton Food vs. Toyota Motor Corp | Hilton Food vs. MOL Hungarian Oil |
| Zanaga Iron vs. Atalaya Mining | Zanaga Iron vs. Anglo Asian Mining | Zanaga Iron vs. Metals Exploration 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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