Correlation Between HM Inwest and M Food
Can any of the company-specific risk be diversified away by investing in both HM Inwest and M Food 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 HM Inwest and M Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HM Inwest SA and M Food SA, you can compare the effects of market volatilities on HM Inwest and M Food 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 HM Inwest with a short position of M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of HM Inwest and M Food.
Diversification Opportunities for HM Inwest and M Food
Very good diversification
The 3 months correlation between HMI and MFD is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding HM Inwest SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food SA and HM Inwest 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 HM Inwest SA are associated (or correlated) with M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of HM Inwest i.e., HM Inwest and M Food go up and down completely randomly.
Pair Corralation between HM Inwest and M Food
Assuming the 90 days trading horizon HM Inwest SA is expected to generate 0.24 times more return on investment than M Food. However, HM Inwest SA is 4.24 times less risky than M Food. It trades about -0.29 of its potential returns per unit of risk. M Food SA is currently generating about -0.43 per unit of risk. If you would invest 4,810 in HM Inwest SA on September 13, 2024 and sell it today you would lose (310.00) from holding HM Inwest SA or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
HM Inwest SA vs. M Food SA
Performance |
| Timeline |
| HM Inwest SA |
| M Food SA |
HM Inwest and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HM Inwest and M Food
The main advantage of trading using opposite HM Inwest and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HM Inwest position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| HM Inwest vs. Bank Millennium SA | HM Inwest vs. Echo Investment SA | HM Inwest vs. PZ Cormay SA | HM Inwest vs. Intersport Polska SA |
| M Food vs. Poznanska Korporacja Budowlana | M Food vs. Esotiq Henderson SA | M Food vs. Toya SA | M Food vs. Betacom SA |
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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