Correlation Between KENEDIX OFFICE and Hormel Foods
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and Hormel 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 KENEDIX OFFICE and Hormel Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and Hormel Foods, you can compare the effects of market volatilities on KENEDIX OFFICE and Hormel 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 KENEDIX OFFICE with a short position of Hormel Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Hormel Foods.
Diversification Opportunities for KENEDIX OFFICE and Hormel Foods
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KENEDIX and Hormel is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with Hormel Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hormel Foods has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and Hormel Foods go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Hormel Foods
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 1.89 times more return on investment than Hormel Foods. However, KENEDIX OFFICE is 1.89 times more volatile than Hormel Foods. It trades about 0.03 of its potential returns per unit of risk. Hormel Foods is currently generating about -0.37 per unit of risk. If you would invest 88,500 in KENEDIX OFFICE INV on October 12, 2024 and sell it today you would earn a total of 500.00 from holding KENEDIX OFFICE INV or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Hormel Foods
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Hormel Foods |
KENEDIX OFFICE and Hormel Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Hormel Foods
The main advantage of trading using opposite KENEDIX OFFICE and Hormel Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, Hormel 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 Hormel Foods will offset losses from the drop in Hormel Foods' long position.| KENEDIX OFFICE vs. Carnegie Clean Energy | KENEDIX OFFICE vs. CVW CLEANTECH INC | KENEDIX OFFICE vs. AWILCO DRILLING PLC | KENEDIX OFFICE vs. New Residential Investment |
| Hormel Foods vs. Materialise NV | Hormel Foods vs. Cleanaway Waste Management | Hormel Foods vs. THRACE PLASTICS | Hormel Foods vs. OFFICE DEPOT |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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