Correlation Between Grand Vision and Hilton Food

Can any of the company-specific risk be diversified away by investing in both Grand Vision and Hilton Food 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 Grand Vision and Hilton Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grand Vision Media and Hilton Food Group, you can compare the effects of market volatilities on Grand Vision and Hilton Food 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 Grand Vision with a short position of Hilton Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Vision and Hilton Food.

Diversification Opportunities for Grand Vision and Hilton Food

-0.15

Correlation Coefficient

Grand Vision  Hilton Food

Good diversification

The 3 months correlation between Grand and Hilton is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Grand Vision Media and Hilton Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Food Group and Grand Vision 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 Grand Vision Media are associated (or correlated) with Hilton Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Food Group has no effect on the direction of Grand Vision i.e., Grand Vision and Hilton Food go up and down completely randomly.

Pair Corralation between Grand Vision and Hilton Food

Assuming the 90 days trading horizon Grand Vision Media is expected to under-perform the Hilton Food. In addition to that, Grand Vision is 2.5 times more volatile than Hilton Food Group. It trades about -0.12 of its total potential returns per unit of risk. Hilton Food Group is currently generating about -0.07 per unit of volatility. If you would invest  96,575  in Hilton Food Group on September 1, 2024 and sell it today you would lose (5,975) from holding Hilton Food Group or give up 6.19% of portfolio value over 90 days.

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

Grand Vision Media  vs.  Hilton Food Group

Grand Vision Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grand Vision Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hilton Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hilton Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Hilton Food is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Grand Vision and Hilton Food

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

The idea behind Grand Vision Media and Hilton Food Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..