Correlation Between Hawesko Holding and Constellation Brands

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

By analyzing existing cross correlation between Hawesko Holding AG and Constellation Brands, you can compare the effects of market volatilities on Hawesko Holding and Constellation Brands 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 Hawesko Holding with a short position of Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawesko Holding and Constellation Brands.

Diversification Opportunities for Hawesko Holding and Constellation Brands

-0.08

Correlation Coefficient

Hawesko Holding  Constellation Brands

Good diversification

The 3 months correlation between Hawesko and Constellation is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hawesko Holding AG and Constellation Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands and Hawesko Holding 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 Hawesko Holding AG are associated (or correlated) with Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of Hawesko Holding i.e., Hawesko Holding and Constellation Brands go up and down completely randomly.

Pair Corralation between Hawesko Holding and Constellation Brands

Assuming the 90 days horizon Hawesko Holding AG is expected to under-perform the Constellation Brands. In addition to that, Hawesko Holding is 1.73 times more volatile than Constellation Brands. It trades about -0.03 of its total potential returns per unit of risk. Constellation Brands is currently generating about 0.02 per unit of volatility. If you would invest  20,632  in Constellation Brands on September 26, 2024 and sell it today you would earn a total of  1,228  from holding Constellation Brands or generate 5.95% return on investment over 90 days.

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

Hawesko Holding AG  vs.  Constellation Brands

Hawesko Holding AG

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hawesko Holding AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hawesko Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Constellation Brands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Constellation Brands has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Constellation Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hawesko Holding and Constellation Brands

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

The idea behind Hawesko Holding AG and Constellation Brands 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.