Correlation Between Hunya Foods and GeneFerm Biotechnology
Can any of the company-specific risk be diversified away by investing in both Hunya Foods and GeneFerm Biotechnology 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 Hunya Foods and GeneFerm Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hunya Foods Co and GeneFerm Biotechnology Co, you can compare the effects of market volatilities on Hunya Foods and GeneFerm Biotechnology 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 Hunya Foods with a short position of GeneFerm Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hunya Foods and GeneFerm Biotechnology.
Diversification Opportunities for Hunya Foods and GeneFerm Biotechnology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hunya and GeneFerm is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hunya Foods Co and GeneFerm Biotechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneFerm Biotechnology and Hunya Foods 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 Hunya Foods Co are associated (or correlated) with GeneFerm Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneFerm Biotechnology has no effect on the direction of Hunya Foods i.e., Hunya Foods and GeneFerm Biotechnology go up and down completely randomly.
Pair Corralation between Hunya Foods and GeneFerm Biotechnology
Assuming the 90 days trading horizon Hunya Foods Co is expected to generate 0.4 times more return on investment than GeneFerm Biotechnology. However, Hunya Foods Co is 2.51 times less risky than GeneFerm Biotechnology. It trades about -0.09 of its potential returns per unit of risk. GeneFerm Biotechnology Co is currently generating about -0.13 per unit of risk. If you would invest 2,350 in Hunya Foods Co on October 16, 2024 and sell it today you would lose (95.00) from holding Hunya Foods Co or give up 4.04% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hunya Foods Co vs. GeneFerm Biotechnology Co
Performance |
Timeline |
Hunya Foods |
GeneFerm Biotechnology |
Hunya Foods and GeneFerm Biotechnology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hunya Foods and GeneFerm Biotechnology
The main advantage of trading using opposite Hunya Foods and GeneFerm Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hunya Foods position performs unexpectedly, GeneFerm Biotechnology 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 GeneFerm Biotechnology will offset losses from the drop in GeneFerm Biotechnology's long position.Hunya Foods vs. AGV Products Corp | ||
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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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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