Correlation Between Goodfood Market and Hampton Financial

Can any of the company-specific risk be diversified away by investing in both Goodfood Market and Hampton Financial 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 Goodfood Market and Hampton Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goodfood Market Corp and Hampton Financial Corp, you can compare the effects of market volatilities on Goodfood Market and Hampton Financial 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 Goodfood Market with a short position of Hampton Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and Hampton Financial.

Diversification Opportunities for Goodfood Market and Hampton Financial

0.41

Correlation Coefficient

Goodfood Market  Hampton Financial

Very weak diversification

The 3 months correlation between Goodfood and Hampton is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and Hampton Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hampton Financial Corp and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with Hampton Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hampton Financial Corp has no effect on the direction of Goodfood Market i.e., Goodfood Market and Hampton Financial go up and down completely randomly.

Pair Corralation between Goodfood Market and Hampton Financial

Assuming the 90 days trading horizon Goodfood Market Corp is expected to under-perform the Hampton Financial. In addition to that, Goodfood Market is 3.16 times more volatile than Hampton Financial Corp. It trades about -0.1 of its total potential returns per unit of risk. Hampton Financial Corp is currently generating about -0.14 per unit of volatility. If you would invest  45.00  in Hampton Financial Corp on December 23, 2024 and sell it today you would lose (5.00) from holding Hampton Financial Corp or give up 11.11% of portfolio value over 90 days.

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

Goodfood Market Corp  vs.  Hampton Financial Corp

Goodfood Market Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goodfood Market Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hampton Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hampton Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

Pair Trading with Goodfood Market and Hampton Financial

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

The idea behind Goodfood Market Corp and Hampton Financial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.