Correlation Between 26441CAX3 and Hf Foods

Can any of the company-specific risk be diversified away by investing in both 26441CAX3 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 26441CAX3 and Hf Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY P and Hf Foods Group, you can compare the effects of market volatilities on 26441CAX3 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 26441CAX3 with a short position of Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26441CAX3 and Hf Foods.

Diversification Opportunities for 26441CAX3 and Hf Foods

0.35

Correlation Coefficient

26441CAX3  Hf Foods

Weak diversification

The 3 months correlation between 26441CAX3 and HFFG is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY P 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 26441CAX3 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 DUKE ENERGY P 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 26441CAX3 i.e., 26441CAX3 and Hf Foods go up and down completely randomly.

Pair Corralation between 26441CAX3 and Hf Foods

Assuming the 90 days trading horizon DUKE ENERGY P is expected to generate 0.07 times more return on investment than Hf Foods. However, DUKE ENERGY P is 14.2 times less risky than Hf Foods. It trades about 0.01 of its potential returns per unit of risk. Hf Foods Group is currently generating about -0.13 per unit of risk. If you would invest  9,589  in DUKE ENERGY P on October 10, 2024 and sell it today you would earn a total of  4.00  from holding DUKE ENERGY P or generate 0.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.5%
Values	Daily Returns

DUKE ENERGY P  vs.  Hf Foods Group

DUKE ENERGY P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26441CAX3 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 latest inconsistent performance, the Stock's technical and fundamental 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 26441CAX3 and Hf Foods

The main advantage of trading using opposite 26441CAX3 and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26441CAX3 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 DUKE ENERGY P 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.