Correlation Between Volkswagen and HF FOODS
Can any of the company-specific risk be diversified away by investing in both Volkswagen 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 Volkswagen and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volkswagen AG and HF FOODS GRP, you can compare the effects of market volatilities on Volkswagen 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 Volkswagen with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volkswagen and HF FOODS.
Diversification Opportunities for Volkswagen and HF FOODS
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volkswagen and 3GX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Volkswagen AG 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 Volkswagen 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 Volkswagen AG 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 Volkswagen i.e., Volkswagen and HF FOODS go up and down completely randomly.
Pair Corralation between Volkswagen and HF FOODS
Assuming the 90 days trading horizon Volkswagen is expected to generate 10.1 times less return on investment than HF FOODS. But when comparing it to its historical volatility, Volkswagen AG is 1.47 times less risky than HF FOODS. It trades about 0.04 of its potential returns per unit of risk. HF FOODS GRP is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 322.00 in HF FOODS GRP on September 12, 2024 and sell it today you would earn a total of 38.00 from holding HF FOODS GRP or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Volkswagen AG vs. HF FOODS GRP
Performance |
| Timeline |
| Volkswagen AG |
| HF FOODS GRP |
Volkswagen and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volkswagen and HF FOODS
The main advantage of trading using opposite Volkswagen and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volkswagen 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.| Volkswagen vs. HF FOODS GRP | Volkswagen vs. LION ONE METALS | Volkswagen vs. Associated British Foods | Volkswagen vs. Lifeway Foods |
| HF FOODS vs. INFORMATION SVC GRP | HF FOODS vs. Pure Storage | HF FOODS vs. DATAGROUP SE | HF FOODS vs. AXWAY SOFTWARE EO |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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