Correlation Between Goodfood Market and Helios Fairfax

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

Diversification Opportunities for Goodfood Market and Helios Fairfax

-0.29

Correlation Coefficient

Goodfood Market  Helios Fairfax

Very good diversification

The 3 months correlation between Goodfood and Helios is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and Helios Fairfax Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helios Fairfax Partners 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 Helios Fairfax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helios Fairfax Partners has no effect on the direction of Goodfood Market i.e., Goodfood Market and Helios Fairfax go up and down completely randomly.

Pair Corralation between Goodfood Market and Helios Fairfax

Assuming the 90 days trading horizon Goodfood Market Corp is expected to generate 0.93 times more return on investment than Helios Fairfax. However, Goodfood Market Corp is 1.08 times less risky than Helios Fairfax. It trades about 0.02 of its potential returns per unit of risk. Helios Fairfax Partners is currently generating about 0.01 per unit of risk. If you would invest  54.00  in Goodfood Market Corp on October 24, 2024 and sell it today you would lose (3.00) from holding Goodfood Market Corp or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Goodfood Market Corp  vs.  Helios Fairfax Partners

Goodfood Market Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goodfood Market Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Goodfood Market displayed solid returns over the last few months and may actually be approaching a breakup point.

Helios Fairfax Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Goodfood Market and Helios Fairfax

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

The idea behind Goodfood Market Corp and Helios Fairfax Partners 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.