Correlation Between Hilton Food and TR Property

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

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

Diversification Opportunities for Hilton Food and TR Property

-0.48

Correlation Coefficient

Hilton Food  TR Property

Very good diversification

The 3 months correlation between Hilton and TRY is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Food Group and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment and Hilton Food 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 Hilton Food Group are associated (or correlated) with TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of Hilton Food i.e., Hilton Food and TR Property go up and down completely randomly.

Pair Corralation between Hilton Food and TR Property

Assuming the 90 days trading horizon Hilton Food Group is expected to generate 1.24 times more return on investment than TR Property. However, Hilton Food is 1.24 times more volatile than TR Property Investment. It trades about 0.04 of its potential returns per unit of risk. TR Property Investment is currently generating about -0.18 per unit of risk. If you would invest  86,977  in Hilton Food Group on October 10, 2024 and sell it today you would earn a total of  2,623  from holding Hilton Food Group or generate 3.02% return on investment over 90 days.

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

Hilton Food Group  vs.  TR Property Investment

Hilton Food Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Food Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

TR Property Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TR Property Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Hilton Food and TR Property

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

The idea behind Hilton Food Group and TR Property Investment 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.