Correlation Between Hf Foods and Estrella Immunopharma

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

Diversification Opportunities for Hf Foods and Estrella Immunopharma

0.24

Correlation Coefficient

Hf Foods  Estrella Immunopharma

Modest diversification

The 3 months correlation between HFFG and Estrella is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Estrella Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estrella Immunopharma 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 Estrella Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estrella Immunopharma has no effect on the direction of Hf Foods i.e., Hf Foods and Estrella Immunopharma go up and down completely randomly.

Pair Corralation between Hf Foods and Estrella Immunopharma

Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the Estrella Immunopharma. But the stock apears to be less risky and, when comparing its historical volatility, Hf Foods Group is 17.73 times less risky than Estrella Immunopharma. The stock trades about -0.17 of its potential returns per unit of risk. The Estrella Immunopharma is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  8.49  in Estrella Immunopharma on October 25, 2024 and sell it today you would earn a total of  0.61  from holding Estrella Immunopharma or generate 7.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	28.81%
Values	Daily Returns

Hf Foods Group  vs.  Estrella Immunopharma

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.

Estrella Immunopharma

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Estrella Immunopharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly uncertain basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hf Foods and Estrella Immunopharma

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

The idea behind Hf Foods Group and Estrella Immunopharma 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.

Check out your portfolio center.

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.