Correlation Between Hf Foods and Denison Mines

Can any of the company-specific risk be diversified away by investing in both Hf Foods and Denison Mines 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 Denison Mines 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 Denison Mines Corp, you can compare the effects of market volatilities on Hf Foods and Denison Mines 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 Denison Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Denison Mines.

Diversification Opportunities for Hf Foods and Denison Mines

0.62

Correlation Coefficient

Hf Foods  Denison Mines

Poor diversification

The 3 months correlation between HFFG and Denison is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp 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 Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Hf Foods i.e., Hf Foods and Denison Mines go up and down completely randomly.

Pair Corralation between Hf Foods and Denison Mines

Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the Denison Mines. In addition to that, Hf Foods is 1.19 times more volatile than Denison Mines Corp. It trades about -0.01 of its total potential returns per unit of risk. Denison Mines Corp is currently generating about 0.03 per unit of volatility. If you would invest  144.00  in Denison Mines Corp on October 22, 2024 and sell it today you would earn a total of  44.00  from holding Denison Mines Corp or generate 30.56% return on investment over 90 days.

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

Hf Foods Group  vs.  Denison Mines Corp

Hf Foods Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hf Foods Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Denison Mines Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hf Foods and Denison Mines

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

The idea behind Hf Foods Group and Denison Mines 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.