Correlation Between Hanover Foods and Goodheart Willcox

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

By analyzing existing cross correlation between Hanover Foods and The Goodheart Willcox, you can compare the effects of market volatilities on Hanover Foods and Goodheart Willcox 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 Hanover Foods with a short position of Goodheart Willcox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanover Foods and Goodheart Willcox.

Diversification Opportunities for Hanover Foods and Goodheart Willcox

-0.16

Correlation Coefficient

Hanover Foods  Goodheart Willcox

Good diversification

The 3 months correlation between Hanover and Goodheart is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hanover Foods and The Goodheart Willcox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodheart Willcox and Hanover 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 Hanover Foods are associated (or correlated) with Goodheart Willcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodheart Willcox has no effect on the direction of Hanover Foods i.e., Hanover Foods and Goodheart Willcox go up and down completely randomly.

Pair Corralation between Hanover Foods and Goodheart Willcox

If you would invest  40,000  in The Goodheart Willcox on September 25, 2024 and sell it today you would earn a total of  3,500  from holding The Goodheart Willcox or generate 8.75% return on investment over 90 days.

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

Hanover Foods  vs.  The Goodheart Willcox

Hanover Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hanover Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hanover Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goodheart Willcox

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Goodheart Willcox are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Goodheart Willcox is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hanover Foods and Goodheart Willcox

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

The idea behind Hanover Foods and The Goodheart Willcox 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.