Correlation Between Valens and Hf Foods
Can any of the company-specific risk be diversified away by investing in both Valens 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 Valens and Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and Hf Foods Group, you can compare the effects of market volatilities on Valens 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 Valens with a short position of Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and Hf Foods.
Diversification Opportunities for Valens and Hf Foods
Good diversification
The 3 months correlation between Valens and HFFG is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Valens and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group and Valens 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 Valens 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 Group has no effect on the direction of Valens i.e., Valens and Hf Foods go up and down completely randomly.
Pair Corralation between Valens and Hf Foods
Considering the 90-day investment horizon Valens is expected to under-perform the Hf Foods. But the stock apears to be less risky and, when comparing its historical volatility, Valens is 1.03 times less risky than Hf Foods. The stock trades about -0.06 of its potential returns per unit of risk. The Hf Foods Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 353.00 in Hf Foods Group on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Hf Foods Group or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valens vs. Hf Foods Group
Performance |
| Timeline |
| Valens |
| Hf Foods Group |
Valens and Hf Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and Hf Foods
The main advantage of trading using opposite Valens and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens 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' long position.The idea behind Valens and Hf Foods Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. G Willi Food International | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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