Correlation Between Spire Healthcare and Hilton Food

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

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

Diversification Opportunities for Spire Healthcare and Hilton Food

-0.62

Correlation Coefficient

Spire Healthcare  Hilton Food

Excellent diversification

The 3 months correlation between Spire and Hilton is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Hilton Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Food Group and Spire Healthcare 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 Spire Healthcare Group are associated (or correlated) with Hilton Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Food Group has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Hilton Food go up and down completely randomly.

Pair Corralation between Spire Healthcare and Hilton Food

Assuming the 90 days trading horizon Spire Healthcare is expected to generate 9.53 times less return on investment than Hilton Food. But when comparing it to its historical volatility, Spire Healthcare Group is 1.12 times less risky than Hilton Food. It trades about 0.01 of its potential returns per unit of risk. Hilton Food Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  74,542  in Hilton Food Group on September 30, 2024 and sell it today you would earn a total of  14,958  from holding Hilton Food Group or generate 20.07% return on investment over 90 days.

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

Spire Healthcare Group  vs.  Hilton Food Group

Spire Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spire Healthcare Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Spire Healthcare is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Hilton Food Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Food Group are ranked lower than 1 (%) 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Spire Healthcare and Hilton Food

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

The idea behind Spire Healthcare Group and Hilton Food 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.