Correlation Between Hf Foods and J Long

Can any of the company-specific risk be diversified away by investing in both Hf Foods and J Long 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 J Long 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 J Long Group Limited, you can compare the effects of market volatilities on Hf Foods and J Long 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 J Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and J Long.

Diversification Opportunities for Hf Foods and J Long

-0.29

Correlation Coefficient

Hf Foods  J Long

Very good diversification

The 3 months correlation between HFFG and J Long is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and J Long Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Long Group 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 J Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Long Group has no effect on the direction of Hf Foods i.e., Hf Foods and J Long go up and down completely randomly.

Pair Corralation between Hf Foods and J Long

Given the investment horizon of 90 days Hf Foods Group is expected to under-perform the J Long. But the stock apears to be less risky and, when comparing its historical volatility, Hf Foods Group is 4.48 times less risky than J Long. The stock trades about -0.05 of its potential returns per unit of risk. The J Long Group Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  395.00  in J Long Group Limited on September 30, 2024 and sell it today you would lose (30.00) from holding J Long Group Limited or give up 7.59% of portfolio value over 90 days.

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

Hf Foods Group  vs.  J Long Group Limited

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.

J Long Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in J Long Group Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, J Long disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hf Foods and J Long

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

The idea behind Hf Foods Group and J Long Group Limited 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.