Correlation Between Weyco and Hf Foods
Can any of the company-specific risk be diversified away by investing in both Weyco 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 Weyco and Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Hf Foods Group, you can compare the effects of market volatilities on Weyco 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 Weyco with a short position of Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Hf Foods.
Diversification Opportunities for Weyco and Hf Foods
Very weak diversification
The 3 months correlation between Weyco and HFFG is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group 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 Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Hf Foods go up and down completely randomly.
Pair Corralation between Weyco and Hf Foods
Given the investment horizon of 90 days Weyco is expected to generate 1.36 times less return on investment than Hf Foods. But when comparing it to its historical volatility, Weyco Group is 1.57 times less risky than Hf Foods. It trades about 0.07 of its potential returns per unit of risk. Hf Foods Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 294.00 in Hf Foods Group on September 3, 2024 and sell it today you would earn a total of 84.00 from holding Hf Foods Group or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. Hf Foods Group
Performance |
| Timeline |
| Weyco Group |
| Hf Foods Group |
Weyco and Hf Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Hf Foods
The main advantage of trading using opposite Weyco and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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 Weyco Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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