Correlation Between Hf Foods and Banc Of

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

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

Diversification Opportunities for Hf Foods and Banc Of

0.49

Correlation Coefficient

Hf Foods  Banc Of

Very weak diversification

The 3 months correlation between HFFG and Banc is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Banc of California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banc of California and Hf Foods 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 Hf Foods Group are associated (or correlated) with Banc Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banc of California has no effect on the direction of Hf Foods i.e., Hf Foods and Banc Of go up and down completely randomly.

Pair Corralation between Hf Foods and Banc Of

Given the investment horizon of 90 days Hf Foods Group is expected to generate 5.42 times more return on investment than Banc Of. However, Hf Foods is 5.42 times more volatile than Banc of California. It trades about 0.12 of its potential returns per unit of risk. Banc of California is currently generating about 0.09 per unit of risk. If you would invest  307.00  in Hf Foods Group on September 12, 2024 and sell it today you would earn a total of  76.00  from holding Hf Foods Group or generate 24.76% return on investment over 90 days.

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

Hf Foods Group  vs.  Banc of California

Hf Foods Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hf Foods Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Hf Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Banc of California

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Banc of California are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Banc Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hf Foods and Banc Of

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

The idea behind Hf Foods Group and Banc of California 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 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.