Correlation Between FANDIFI TECHNOLOGY and Hormel Foods
Can any of the company-specific risk be diversified away by investing in both FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY and Hormel Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FANDIFI TECHNOLOGY P and Hormel Foods, you can compare the effects of market volatilities on FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY with a short position of Hormel Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of FANDIFI TECHNOLOGY and Hormel Foods.
Diversification Opportunities for FANDIFI TECHNOLOGY and Hormel Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FANDIFI and Hormel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FANDIFI TECHNOLOGY P and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P 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 FANDIFI TECHNOLOGY i.e., FANDIFI TECHNOLOGY and Hormel Foods go up and down completely randomly.
Pair Corralation between FANDIFI TECHNOLOGY and Hormel Foods
Assuming the 90 days horizon FANDIFI TECHNOLOGY P is expected to generate 11.06 times more return on investment than Hormel Foods. However, FANDIFI TECHNOLOGY is 11.06 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 0.04 per unit of risk. If you would invest 0.15 in FANDIFI TECHNOLOGY P on September 14, 2024 and sell it today you would lose (0.10) from holding FANDIFI TECHNOLOGY P or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
FANDIFI TECHNOLOGY P vs. Hormel Foods
Performance |
| Timeline |
| FANDIFI TECHNOLOGY |
| Hormel Foods |
FANDIFI TECHNOLOGY and Hormel Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FANDIFI TECHNOLOGY and Hormel Foods
The main advantage of trading using opposite FANDIFI TECHNOLOGY and Hormel Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FANDIFI TECHNOLOGY 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.| FANDIFI TECHNOLOGY vs. Superior Plus Corp | FANDIFI TECHNOLOGY vs. SIVERS SEMICONDUCTORS AB | FANDIFI TECHNOLOGY vs. Norsk Hydro ASA | FANDIFI TECHNOLOGY vs. Reliance Steel Aluminum |
| Hormel Foods vs. Guidewire Software | Hormel Foods vs. Carsales | Hormel Foods vs. GEELY AUTOMOBILE | Hormel Foods vs. NORTHEAST UTILITIES |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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