Correlation Between Hiru and Loblaw Companies
Can any of the company-specific risk be diversified away by investing in both Hiru and Loblaw Companies 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 Hiru and Loblaw Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hiru Corporation and Loblaw Companies Limited, you can compare the effects of market volatilities on Hiru and Loblaw Companies 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 Hiru with a short position of Loblaw Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiru and Loblaw Companies.
Diversification Opportunities for Hiru and Loblaw Companies
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hiru and Loblaw is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hiru Corp. and Loblaw Companies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loblaw Companies and Hiru 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 Hiru Corporation are associated (or correlated) with Loblaw Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loblaw Companies has no effect on the direction of Hiru i.e., Hiru and Loblaw Companies go up and down completely randomly.
Pair Corralation between Hiru and Loblaw Companies
Given the investment horizon of 90 days Hiru Corporation is expected to under-perform the Loblaw Companies. In addition to that, Hiru is 8.59 times more volatile than Loblaw Companies Limited. It trades about -0.27 of its total potential returns per unit of risk. Loblaw Companies Limited is currently generating about -0.26 per unit of volatility. If you would invest 13,274 in Loblaw Companies Limited on October 21, 2024 and sell it today you would lose (716.00) from holding Loblaw Companies Limited or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hiru Corp. vs. Loblaw Companies Limited
Performance |
| Timeline |
| Hiru |
| Loblaw Companies |
Hiru and Loblaw Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hiru and Loblaw Companies
The main advantage of trading using opposite Hiru and Loblaw Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiru position performs unexpectedly, Loblaw Companies 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 Loblaw Companies will offset losses from the drop in Loblaw Companies' long position.| Hiru vs. Indo Global Exchange | Hiru vs. Genesis Electronics Group | Hiru vs. Protext Mobility | Hiru vs. TonnerOne World Holdings |
| Loblaw Companies vs. Sprouts Farmers Market | Loblaw Companies vs. Kroger Company | Loblaw Companies vs. Village Super Market | Loblaw Companies vs. Weis Markets |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |