Correlation Between Ross Stores and Hf Foods

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

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

Diversification Opportunities for Ross Stores and Hf Foods

0.45

Correlation Coefficient

Ross Stores  Hf Foods

Very weak diversification

The 3 months correlation between Ross and HFFG is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group and Ross Stores 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 Ross Stores are associated (or correlated) with Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of Ross Stores i.e., Ross Stores and Hf Foods go up and down completely randomly.

Pair Corralation between Ross Stores and Hf Foods

Given the investment horizon of 90 days Ross Stores is expected to generate 0.37 times more return on investment than Hf Foods. However, Ross Stores is 2.74 times less risky than Hf Foods. It trades about 0.08 of its potential returns per unit of risk. Hf Foods Group is currently generating about 0.0 per unit of risk. If you would invest  11,227  in Ross Stores on October 5, 2024 and sell it today you would earn a total of  4,198  from holding Ross Stores or generate 37.39% return on investment over 90 days.

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

Ross Stores  vs.  Hf Foods Group

Ross Stores

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Ross Stores may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 nearly stable technical and fundamental indicators, Hf Foods is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ross Stores and Hf Foods

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

The idea behind Ross Stores and Hf Foods Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.