Correlation Between NorAm Drilling and HF FOODS
Can any of the company-specific risk be diversified away by investing in both NorAm Drilling and HF 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 NorAm Drilling and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorAm Drilling AS and HF FOODS GRP, you can compare the effects of market volatilities on NorAm Drilling and HF 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 NorAm Drilling with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorAm Drilling and HF FOODS.
Diversification Opportunities for NorAm Drilling and HF FOODS
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NorAm and 3GX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NorAm Drilling AS and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP and NorAm Drilling 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 NorAm Drilling AS are associated (or correlated) with HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of NorAm Drilling i.e., NorAm Drilling and HF FOODS go up and down completely randomly.
Pair Corralation between NorAm Drilling and HF FOODS
Assuming the 90 days horizon NorAm Drilling AS is expected to generate 1.99 times more return on investment than HF FOODS. However, NorAm Drilling is 1.99 times more volatile than HF FOODS GRP. It trades about 0.04 of its potential returns per unit of risk. HF FOODS GRP is currently generating about -0.6 per unit of risk. If you would invest 292.00 in NorAm Drilling AS on December 4, 2024 and sell it today you would earn a total of 3.00 from holding NorAm Drilling AS or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NorAm Drilling AS vs. HF FOODS GRP
Performance |
| Timeline |
| NorAm Drilling AS |
| HF FOODS GRP |
NorAm Drilling and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorAm Drilling and HF FOODS
The main advantage of trading using opposite NorAm Drilling and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorAm Drilling position performs unexpectedly, HF 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| NorAm Drilling vs. US Foods Holding | NorAm Drilling vs. MONEYSUPERMARKET | NorAm Drilling vs. Nanjing Panda Electronics | NorAm Drilling vs. STMICROELECTRONICS |
| HF FOODS vs. Summit Hotel Properties | HF FOODS vs. Selective Insurance Group | HF FOODS vs. HYATT HOTELS A | HF FOODS vs. Vienna Insurance Group |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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