Correlation Between Hormel Foods and NORDIC HALIBUT
Can any of the company-specific risk be diversified away by investing in both Hormel Foods and NORDIC HALIBUT 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 NORDIC HALIBUT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and NORDIC HALIBUT AS, you can compare the effects of market volatilities on Hormel Foods and NORDIC HALIBUT 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 NORDIC HALIBUT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and NORDIC HALIBUT.
Diversification Opportunities for Hormel Foods and NORDIC HALIBUT
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hormel and NORDIC is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and NORDIC HALIBUT AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORDIC HALIBUT AS 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 NORDIC HALIBUT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORDIC HALIBUT AS has no effect on the direction of Hormel Foods i.e., Hormel Foods and NORDIC HALIBUT go up and down completely randomly.
Pair Corralation between Hormel Foods and NORDIC HALIBUT
Assuming the 90 days horizon Hormel Foods is expected to under-perform the NORDIC HALIBUT. But the stock apears to be less risky and, when comparing its historical volatility, Hormel Foods is 1.57 times less risky than NORDIC HALIBUT. The stock trades about -0.01 of its potential returns per unit of risk. The NORDIC HALIBUT AS is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 202.00 in NORDIC HALIBUT AS on September 12, 2024 and sell it today you would lose (29.00) from holding NORDIC HALIBUT AS or give up 14.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. NORDIC HALIBUT AS
Performance |
| Timeline |
| Hormel Foods |
| NORDIC HALIBUT AS |
Hormel Foods and NORDIC HALIBUT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and NORDIC HALIBUT
The main advantage of trading using opposite Hormel Foods and NORDIC HALIBUT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods position performs unexpectedly, NORDIC HALIBUT 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 NORDIC HALIBUT will offset losses from the drop in NORDIC HALIBUT's long position.| Hormel Foods vs. Shenandoah Telecommunications | Hormel Foods vs. Iridium Communications | Hormel Foods vs. Ribbon Communications | Hormel Foods vs. Citic Telecom International |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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