Correlation Between Trainers House and HKFoods Oyj

Can any of the company-specific risk be diversified away by investing in both Trainers House and HKFoods Oyj 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 Trainers House and HKFoods Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trainers House Oyj and HKFoods Oyj A, you can compare the effects of market volatilities on Trainers House and HKFoods Oyj 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 Trainers House with a short position of HKFoods Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainers House and HKFoods Oyj.

Diversification Opportunities for Trainers House and HKFoods Oyj

0.03

Correlation Coefficient

Trainers House  HKFoods Oyj

Significant diversification

The 3 months correlation between Trainers and HKFoods is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Trainers House Oyj and HKFoods Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HKFoods Oyj A and Trainers House 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 Trainers House Oyj are associated (or correlated) with HKFoods Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HKFoods Oyj A has no effect on the direction of Trainers House i.e., Trainers House and HKFoods Oyj go up and down completely randomly.

Pair Corralation between Trainers House and HKFoods Oyj

Assuming the 90 days trading horizon Trainers House is expected to generate 69.13 times less return on investment than HKFoods Oyj. In addition to that, Trainers House is 1.3 times more volatile than HKFoods Oyj A. It trades about 0.0 of its total potential returns per unit of risk. HKFoods Oyj A is currently generating about 0.28 per unit of volatility. If you would invest  77.00  in HKFoods Oyj A on December 22, 2024 and sell it today you would earn a total of  41.00  from holding HKFoods Oyj A or generate 53.25% return on investment over 90 days.

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

Trainers House Oyj  vs.  HKFoods Oyj A

Trainers House Oyj

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trainers House Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Trainers House is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

HKFoods Oyj A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HKFoods Oyj A are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, HKFoods Oyj unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trainers House and HKFoods Oyj

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

The idea behind Trainers House Oyj and HKFoods Oyj A 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.