Correlation Between Hf Foods and FRONTEO

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

Diversification Opportunities for Hf Foods and FRONTEO

0.0

Correlation Coefficient

Hf Foods  FRONTEO

Pay attention - limited upside

The 3 months correlation between HFFG and FRONTEO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and FRONTEO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRONTEO 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 FRONTEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRONTEO has no effect on the direction of Hf Foods i.e., Hf Foods and FRONTEO go up and down completely randomly.

Pair Corralation between Hf Foods and FRONTEO

If you would invest (100.00) in FRONTEO on January 30, 2024 and sell it today you would earn a total of  100.00  from holding FRONTEO or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hf Foods Group  vs.  FRONTEO

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FRONTEO

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FRONTEO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, FRONTEO is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hf Foods and FRONTEO

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

The idea behind Hf Foods Group and FRONTEO 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.