Correlation Between WH Group and Hormel Foods
Can any of the company-specific risk be diversified away by investing in both WH Group 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 WH Group and Hormel Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WH Group Limited and Hormel Foods, you can compare the effects of market volatilities on WH Group 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 WH Group with a short position of Hormel Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of WH Group and Hormel Foods.
Diversification Opportunities for WH Group and Hormel Foods
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WHGRF and Hormel is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding WH Group Limited and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods and WH Group 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 WH Group Limited 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 WH Group i.e., WH Group and Hormel Foods go up and down completely randomly.
Pair Corralation between WH Group and Hormel Foods
Assuming the 90 days horizon WH Group Limited is expected to generate 9.41 times more return on investment than Hormel Foods. However, WH Group is 9.41 times more volatile than Hormel Foods. It trades about 0.1 of its potential returns per unit of risk. Hormel Foods is currently generating about -0.02 per unit of risk. If you would invest 27.00 in WH Group Limited on August 31, 2024 and sell it today you would earn a total of 52.00 from holding WH Group Limited or generate 192.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.01% |
| Values | Daily Returns |
WH Group Limited vs. Hormel Foods
Performance |
| Timeline |
| WH Group Limited |
| Hormel Foods |
WH Group and Hormel Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WH Group and Hormel Foods
The main advantage of trading using opposite WH Group and Hormel Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WH Group 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.| WH Group vs. Premier Foods Plc | WH Group vs. Torque Lifestyle Brands | WH Group vs. Naturally Splendid Enterprises | WH Group vs. Aryzta AG PK |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |