Correlation Between HF FOODS and Beyond Meat

Can any of the company-specific risk be diversified away by investing in both HF FOODS and Beyond Meat 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 HF FOODS and Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HF FOODS GRP and Beyond Meat, you can compare the effects of market volatilities on HF FOODS and Beyond Meat 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 HF FOODS with a short position of Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Beyond Meat.

Diversification Opportunities for HF FOODS and Beyond Meat

0.39

Correlation Coefficient

HF FOODS  Beyond Meat

Weak diversification

The 3 months correlation between 3GX and Beyond is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat and HF 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 HF FOODS GRP are associated (or correlated) with Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of HF FOODS i.e., HF FOODS and Beyond Meat go up and down completely randomly.

Pair Corralation between HF FOODS and Beyond Meat

Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the Beyond Meat. But the stock apears to be less risky and, when comparing its historical volatility, HF FOODS GRP is 1.37 times less risky than Beyond Meat. The stock trades about -0.31 of its potential returns per unit of risk. The Beyond Meat is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  478.00  in Beyond Meat on November 28, 2024 and sell it today you would lose (126.00) from holding Beyond Meat or give up 26.36% of portfolio value over 90 days.

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

HF FOODS GRP  vs.  Beyond Meat

HF FOODS GRP

Risk-Adjusted Performance

Very Weak

Over the last 90 days HF FOODS GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Beyond Meat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beyond Meat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HF FOODS and Beyond Meat

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

The idea behind HF FOODS GRP and Beyond Meat 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.