Correlation Between Fresh Grapes and Hormel Foods
Can any of the company-specific risk be diversified away by investing in both Fresh Grapes 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 Fresh Grapes and Hormel Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresh Grapes LLC and Hormel Foods, you can compare the effects of market volatilities on Fresh Grapes 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 Fresh Grapes with a short position of Hormel Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresh Grapes and Hormel Foods.
Diversification Opportunities for Fresh Grapes and Hormel Foods
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fresh and Hormel is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Grapes LLC and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods and Fresh Grapes 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 Fresh Grapes LLC 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 Fresh Grapes i.e., Fresh Grapes and Hormel Foods go up and down completely randomly.
Pair Corralation between Fresh Grapes and Hormel Foods
Given the investment horizon of 90 days Fresh Grapes LLC is expected to under-perform the Hormel Foods. In addition to that, Fresh Grapes is 8.58 times more volatile than Hormel Foods. It trades about -0.06 of its total potential returns per unit of risk. Hormel Foods is currently generating about 0.14 per unit of volatility. If you would invest 3,069 in Hormel Foods on August 30, 2024 and sell it today you would earn a total of 123.00 from holding Hormel Foods or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresh Grapes LLC vs. Hormel Foods
Performance |
| Timeline |
| Fresh Grapes LLC |
| Hormel Foods |
Fresh Grapes and Hormel Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresh Grapes and Hormel Foods
The main advantage of trading using opposite Fresh Grapes and Hormel Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresh Grapes 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.| Fresh Grapes vs. Andrew Peller Limited | Fresh Grapes vs. Naked Wines plc | Fresh Grapes vs. Willamette Valley Vineyards | Fresh Grapes vs. The Tinley Beverage |
| Hormel Foods vs. Campbell Soup | Hormel Foods vs. General Mills | Hormel Foods vs. Kellanova | Hormel Foods vs. Lamb Weston Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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