Correlation Between HYDROFARM HLD and Marie Brizard

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

By analyzing existing cross correlation between HYDROFARM HLD GRP and Marie Brizard Wine, you can compare the effects of market volatilities on HYDROFARM HLD and Marie Brizard 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 HYDROFARM HLD with a short position of Marie Brizard. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Marie Brizard.

Diversification Opportunities for HYDROFARM HLD and Marie Brizard

0.32

Correlation Coefficient

HYDROFARM HLD  Marie Brizard

Weak diversification

The 3 months correlation between HYDROFARM and Marie is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine and HYDROFARM HLD 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 HYDROFARM HLD GRP are associated (or correlated) with Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Marie Brizard go up and down completely randomly.

Pair Corralation between HYDROFARM HLD and Marie Brizard

Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 2.79 times more return on investment than Marie Brizard. However, HYDROFARM HLD is 2.79 times more volatile than Marie Brizard Wine. It trades about 0.03 of its potential returns per unit of risk. Marie Brizard Wine is currently generating about 0.02 per unit of risk. If you would invest  59.00  in HYDROFARM HLD GRP on September 20, 2024 and sell it today you would earn a total of  1.00  from holding HYDROFARM HLD GRP or generate 1.69% return on investment over 90 days.

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

HYDROFARM HLD GRP  vs.  Marie Brizard Wine

HYDROFARM HLD GRP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HYDROFARM HLD GRP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HYDROFARM HLD may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Marie Brizard Wine

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Marie Brizard Wine are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Marie Brizard is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HYDROFARM HLD and Marie Brizard

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

The idea behind HYDROFARM HLD GRP and Marie Brizard Wine 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 Transaction History module to view history of all your transactions and understand their impact on performance.