Correlation Between FANDIFI TECHNOLOGY and Hormel Foods

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

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

Diversification Opportunities for FANDIFI TECHNOLOGY and Hormel Foods

0.0

Correlation Coefficient

FANDIFI TECHNOLOGY  Hormel Foods

Pay attention - limited upside

The 3 months correlation between FANDIFI and Hormel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FANDIFI TECHNOLOGY P and Hormel Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hormel Foods and FANDIFI TECHNOLOGY 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 FANDIFI TECHNOLOGY P are associated (or correlated) with Hormel Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hormel Foods has no effect on the direction of FANDIFI TECHNOLOGY i.e., FANDIFI TECHNOLOGY and Hormel Foods go up and down completely randomly.

Pair Corralation between FANDIFI TECHNOLOGY and Hormel Foods

Assuming the 90 days horizon FANDIFI TECHNOLOGY P is expected to under-perform the Hormel Foods. In addition to that, FANDIFI TECHNOLOGY is 6.35 times more volatile than Hormel Foods. It trades about -0.01 of its total potential returns per unit of risk. Hormel Foods is currently generating about -0.02 per unit of volatility. If you would invest  3,012  in Hormel Foods on December 2, 2024 and sell it today you would lose (268.00) from holding Hormel Foods or give up 8.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

FANDIFI TECHNOLOGY P  vs.  Hormel Foods

FANDIFI TECHNOLOGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days FANDIFI TECHNOLOGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, FANDIFI TECHNOLOGY is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Hormel Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hormel Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with FANDIFI TECHNOLOGY and Hormel Foods

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

The idea behind FANDIFI TECHNOLOGY P and Hormel Foods 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.

Check out your portfolio center.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.