Correlation Between Coxon Precise and Hunya Foods

Can any of the company-specific risk be diversified away by investing in both Coxon Precise and Hunya 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 Coxon Precise and Hunya Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coxon Precise Industrial and Hunya Foods Co, you can compare the effects of market volatilities on Coxon Precise and Hunya 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 Coxon Precise with a short position of Hunya Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coxon Precise and Hunya Foods.

Diversification Opportunities for Coxon Precise and Hunya Foods

0.51

Correlation Coefficient

Coxon Precise  Hunya Foods

Very weak diversification

The 3 months correlation between Coxon and Hunya is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Coxon Precise Industrial and Hunya Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunya Foods and Coxon Precise 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 Coxon Precise Industrial are associated (or correlated) with Hunya Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunya Foods has no effect on the direction of Coxon Precise i.e., Coxon Precise and Hunya Foods go up and down completely randomly.

Pair Corralation between Coxon Precise and Hunya Foods

Assuming the 90 days trading horizon Coxon Precise Industrial is expected to under-perform the Hunya Foods. In addition to that, Coxon Precise is 2.5 times more volatile than Hunya Foods Co. It trades about -0.36 of its total potential returns per unit of risk. Hunya Foods Co is currently generating about -0.06 per unit of volatility. If you would invest  2,325  in Hunya Foods Co on October 13, 2024 and sell it today you would lose (25.00) from holding Hunya Foods Co or give up 1.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Coxon Precise Industrial  vs.  Hunya Foods Co

Coxon Precise Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coxon Precise Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Hunya Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hunya Foods Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Hunya Foods is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Coxon Precise and Hunya Foods

The main advantage of trading using opposite Coxon Precise and Hunya Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coxon Precise position performs unexpectedly, Hunya 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 Hunya Foods will offset losses from the drop in Hunya Foods' long position.

The idea behind Coxon Precise Industrial and Hunya Foods Co 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.