Correlation Between Hf Foods and Compania Cervecerias
Can any of the company-specific risk be diversified away by investing in both Hf Foods and Compania Cervecerias 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 Compania Cervecerias 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 Compania Cervecerias Unidas, you can compare the effects of market volatilities on Hf Foods and Compania Cervecerias 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 Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Compania Cervecerias.
Diversification Opportunities for Hf Foods and Compania Cervecerias
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HFFG and Compania is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Compania Cervecerias Unidas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Cervecerias 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 Compania Cervecerias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Cervecerias has no effect on the direction of Hf Foods i.e., Hf Foods and Compania Cervecerias go up and down completely randomly.
Pair Corralation between Hf Foods and Compania Cervecerias
Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the Compania Cervecerias. In addition to that, Hf Foods is 2.54 times more volatile than Compania Cervecerias Unidas. It trades about -0.14 of its total potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.22 per unit of volatility. If you would invest 1,105 in Compania Cervecerias Unidas on September 25, 2024 and sell it today you would earn a total of 55.00 from holding Compania Cervecerias Unidas or generate 4.98% 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. Compania Cervecerias Unidas
Performance |
Timeline |
Hf Foods Group |
Compania Cervecerias |
Hf Foods and Compania Cervecerias Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hf Foods and Compania Cervecerias
The main advantage of trading using opposite Hf Foods and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.The idea behind Hf Foods Group and Compania Cervecerias Unidas 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.Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |