Correlation Between HK Electric and CONAGRA FOODS
Can any of the company-specific risk be diversified away by investing in both HK Electric and CONAGRA FOODS 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 HK Electric and CONAGRA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HK Electric Investments and CONAGRA FOODS, you can compare the effects of market volatilities on HK Electric and CONAGRA FOODS 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 HK Electric with a short position of CONAGRA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HK Electric and CONAGRA FOODS.
Diversification Opportunities for HK Electric and CONAGRA FOODS
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HKT and CONAGRA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding HK Electric Investments and CONAGRA FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONAGRA FOODS and HK Electric 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 HK Electric Investments are associated (or correlated) with CONAGRA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONAGRA FOODS has no effect on the direction of HK Electric i.e., HK Electric and CONAGRA FOODS go up and down completely randomly.
Pair Corralation between HK Electric and CONAGRA FOODS
Assuming the 90 days trading horizon HK Electric Investments is expected to generate 0.62 times more return on investment than CONAGRA FOODS. However, HK Electric Investments is 1.6 times less risky than CONAGRA FOODS. It trades about 0.1 of its potential returns per unit of risk. CONAGRA FOODS is currently generating about -0.07 per unit of risk. If you would invest 61.00 in HK Electric Investments on September 1, 2024 and sell it today you would earn a total of 1.00 from holding HK Electric Investments or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HK Electric Investments vs. CONAGRA FOODS
Performance |
| Timeline |
| HK Electric Investments |
| CONAGRA FOODS |
HK Electric and CONAGRA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HK Electric and CONAGRA FOODS
The main advantage of trading using opposite HK Electric and CONAGRA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HK Electric position performs unexpectedly, CONAGRA FOODS 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 CONAGRA FOODS will offset losses from the drop in CONAGRA FOODS's long position.| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
| CONAGRA FOODS vs. SIVERS SEMICONDUCTORS AB | CONAGRA FOODS vs. Darden Restaurants | CONAGRA FOODS vs. Reliance Steel Aluminum | CONAGRA FOODS vs. Q2M Managementberatung AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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