Correlation Between HF FOODS and Vistra Corp

Can any of the company-specific risk be diversified away by investing in both HF FOODS and Vistra Corp 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 Vistra Corp 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 Vistra Corp, you can compare the effects of market volatilities on HF FOODS and Vistra Corp 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 Vistra Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Vistra Corp.

Diversification Opportunities for HF FOODS and Vistra Corp

-0.12

Correlation Coefficient

HF FOODS  Vistra Corp

Good diversification

The 3 months correlation between 3GX and Vistra is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Vistra Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vistra Corp 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 Vistra Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vistra Corp has no effect on the direction of HF FOODS i.e., HF FOODS and Vistra Corp go up and down completely randomly.

Pair Corralation between HF FOODS and Vistra Corp

Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the Vistra Corp. But the stock apears to be less risky and, when comparing its historical volatility, HF FOODS GRP is 1.63 times less risky than Vistra Corp. The stock trades about -0.62 of its potential returns per unit of risk. The Vistra Corp is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest  16,265  in Vistra Corp on December 4, 2024 and sell it today you would lose (3,915) from holding Vistra Corp or give up 24.07% of portfolio value over 90 days.

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

HF FOODS GRP  vs.  Vistra Corp

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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vistra Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vistra Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with HF FOODS and Vistra Corp

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

The idea behind HF FOODS GRP and Vistra Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.