Correlation Between HF FOODS and Ring Energy
Can any of the company-specific risk be diversified away by investing in both HF FOODS and Ring Energy 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 Ring Energy 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 Ring Energy, you can compare the effects of market volatilities on HF FOODS and Ring Energy 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 Ring Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and Ring Energy.
Diversification Opportunities for HF FOODS and Ring Energy
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 3GX and Ring is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and Ring Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ring Energy 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 Ring Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ring Energy has no effect on the direction of HF FOODS i.e., HF FOODS and Ring Energy go up and down completely randomly.
Pair Corralation between HF FOODS and Ring Energy
Assuming the 90 days horizon HF FOODS GRP is expected to under-perform the Ring Energy. In addition to that, HF FOODS is 1.03 times more volatile than Ring Energy. It trades about -0.44 of its total potential returns per unit of risk. Ring Energy is currently generating about -0.04 per unit of volatility. If you would invest 129.00 in Ring Energy on December 2, 2024 and sell it today you would lose (8.00) from holding Ring Energy or give up 6.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
HF FOODS GRP vs. Ring Energy
Performance |
Timeline |
HF FOODS GRP |
Ring Energy |
HF FOODS and Ring Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HF FOODS and Ring Energy
The main advantage of trading using opposite HF FOODS and Ring Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS position performs unexpectedly, Ring Energy 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 Ring Energy will offset losses from the drop in Ring Energy's long position.HF FOODS vs. Playa Hotels Resorts | HF FOODS vs. Alaska Air Group | HF FOODS vs. Wyndham Hotels Resorts | HF FOODS vs. EMPEROR ENT HOTEL |
Ring Energy vs. Spirent Communications plc | Ring Energy vs. GBS Software AG | Ring Energy vs. Guidewire Software | Ring Energy vs. Beta Systems Software |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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