Correlation Between HOYA and Fresh Harvest

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

By analyzing existing cross correlation between HOYA Corporation and Fresh Harvest Products, you can compare the effects of market volatilities on HOYA and Fresh Harvest 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 HOYA with a short position of Fresh Harvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOYA and Fresh Harvest.

Diversification Opportunities for HOYA and Fresh Harvest

0.1

Correlation Coefficient

HOYA  Fresh Harvest

Average diversification

The 3 months correlation between HOYA and Fresh is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HOYA Corp. and Fresh Harvest Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresh Harvest Products and HOYA 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 HOYA Corporation are associated (or correlated) with Fresh Harvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresh Harvest Products has no effect on the direction of HOYA i.e., HOYA and Fresh Harvest go up and down completely randomly.

Pair Corralation between HOYA and Fresh Harvest

Assuming the 90 days horizon HOYA Corporation is expected to under-perform the Fresh Harvest. But the pink sheet apears to be less risky and, when comparing its historical volatility, HOYA Corporation is 8.66 times less risky than Fresh Harvest. The pink sheet trades about -0.29 of its potential returns per unit of risk. The Fresh Harvest Products is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  52.00  in Fresh Harvest Products on January 25, 2024 and sell it today you would earn a total of  33.00  from holding Fresh Harvest Products or generate 63.46% return on investment over 90 days.

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

HOYA Corp.  vs.  Fresh Harvest Products

HOYA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOYA Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Fresh Harvest Products

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fresh Harvest Products are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Fresh Harvest demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HOYA and Fresh Harvest

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

The idea behind HOYA Corporation and Fresh Harvest Products 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .