Correlation Between Hf Foods and Arq

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

By analyzing existing cross correlation between Hf Foods Group and Arq Inc, you can compare the effects of market volatilities on Hf Foods and Arq 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 Arq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Arq.

Diversification Opportunities for Hf Foods and Arq

0.27

Correlation Coefficient

Hf Foods  Arq

Modest diversification

The 3 months correlation between HFFG and Arq is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Arq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arq Inc 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 Group are associated (or correlated) with Arq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arq Inc has no effect on the direction of Hf Foods i.e., Hf Foods and Arq go up and down completely randomly.

Pair Corralation between Hf Foods and Arq

Given the investment horizon of 90 days Hf Foods Group is expected to generate 2.12 times more return on investment than Arq. However, Hf Foods is 2.12 times more volatile than Arq Inc. It trades about 0.1 of its potential returns per unit of risk. Arq Inc is currently generating about -0.26 per unit of risk. If you would invest  326.00  in Hf Foods Group on December 26, 2024 and sell it today you would earn a total of  108.00  from holding Hf Foods Group or generate 33.13% return on investment over 90 days.

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

Hf Foods Group  vs.  Arq Inc

Hf Foods Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hf Foods Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Hf Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Arq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Arq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Hf Foods and Arq

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

The idea behind Hf Foods Group and Arq Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.