Correlation Between Hf Foods and Tootsie Roll

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

Diversification Opportunities for Hf Foods and Tootsie Roll

-0.07

Correlation Coefficient

Hf Foods  Tootsie Roll

Good diversification

The 3 months correlation between HFFG and Tootsie is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Tootsie Roll Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tootsie Roll Industries 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 Tootsie Roll. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tootsie Roll Industries has no effect on the direction of Hf Foods i.e., Hf Foods and Tootsie Roll go up and down completely randomly.

Pair Corralation between Hf Foods and Tootsie Roll

Given the investment horizon of 90 days Hf Foods Group is expected to generate 2.48 times more return on investment than Tootsie Roll. However, Hf Foods is 2.48 times more volatile than Tootsie Roll Industries. It trades about 0.07 of its potential returns per unit of risk. Tootsie Roll Industries is currently generating about 0.11 per unit of risk. If you would invest  321.00  in Hf Foods Group on August 31, 2024 and sell it today you would earn a total of  40.00  from holding Hf Foods Group or generate 12.46% return on investment over 90 days.

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

Hf Foods Group  vs.  Tootsie Roll Industries

Hf Foods Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hf Foods Group are ranked lower than 5 (%) 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.

Tootsie Roll Industries

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tootsie Roll Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Tootsie Roll may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Hf Foods and Tootsie Roll

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

The idea behind Hf Foods Group and Tootsie Roll Industries 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.