Correlation Between Hormel Foods and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Hormel Foods and SWISS WATER 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 Hormel Foods and SWISS WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Hormel Foods and SWISS WATER 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 Hormel Foods with a short position of SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and SWISS WATER.
Diversification Opportunities for Hormel Foods and SWISS WATER
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hormel and SWISS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE and Hormel Foods 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 Hormel Foods are associated (or correlated) with SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Hormel Foods i.e., Hormel Foods and SWISS WATER go up and down completely randomly.
Pair Corralation between Hormel Foods and SWISS WATER
Assuming the 90 days horizon Hormel Foods is expected to generate 0.36 times more return on investment than SWISS WATER. However, Hormel Foods is 2.77 times less risky than SWISS WATER. It trades about -0.11 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about -0.19 per unit of risk. If you would invest 3,030 in Hormel Foods on October 29, 2024 and sell it today you would lose (78.00) from holding Hormel Foods or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Hormel Foods |
| SWISS WATER DECAFFCOFFEE |
Hormel Foods and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and SWISS WATER
The main advantage of trading using opposite Hormel Foods and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Hormel Foods vs. DXC Technology Co | Hormel Foods vs. Align Technology | Hormel Foods vs. Casio Computer CoLtd | Hormel Foods vs. Check Point Software |
| SWISS WATER vs. DFS Furniture PLC | SWISS WATER vs. Q2M Managementberatung AG | SWISS WATER vs. Perdoceo Education | SWISS WATER vs. Waste Management |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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