Correlation Between Hormel Foods and Steakholder Foods
Can any of the company-specific risk be diversified away by investing in both Hormel Foods and Steakholder 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 Hormel Foods and Steakholder Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and Steakholder Foods, you can compare the effects of market volatilities on Hormel Foods and Steakholder 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 Hormel Foods with a short position of Steakholder Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and Steakholder Foods.
Diversification Opportunities for Hormel Foods and Steakholder Foods
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hormel and Steakholder is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and Steakholder Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steakholder Foods 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 Steakholder Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steakholder Foods has no effect on the direction of Hormel Foods i.e., Hormel Foods and Steakholder Foods go up and down completely randomly.
Pair Corralation between Hormel Foods and Steakholder Foods
Considering the 90-day investment horizon Hormel Foods is expected to generate 0.33 times more return on investment than Steakholder Foods. However, Hormel Foods is 3.07 times less risky than Steakholder Foods. It trades about 0.11 of its potential returns per unit of risk. Steakholder Foods is currently generating about -0.19 per unit of risk. If you would invest 3,079 in Hormel Foods on September 8, 2024 and sell it today you would earn a total of 168.00 from holding Hormel Foods or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. Steakholder Foods
Performance |
| Timeline |
| Hormel Foods |
| Steakholder Foods |
Hormel Foods and Steakholder Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and Steakholder Foods
The main advantage of trading using opposite Hormel Foods and Steakholder Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods position performs unexpectedly, Steakholder 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 Steakholder Foods will offset losses from the drop in Steakholder Foods' long position.| Hormel Foods vs. Campbell Soup | Hormel Foods vs. General Mills | Hormel Foods vs. Kellanova | Hormel Foods vs. Lamb Weston Holdings |
| Steakholder Foods vs. Farmmi Inc | Steakholder Foods vs. Herbalife Nutrition | Steakholder Foods vs. Beyond Meat | Steakholder Foods vs. Bit Origin |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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