Correlation Between Howard Hughes and Hoya Capital

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

By analyzing existing cross correlation between Howard Hughes and Hoya Capital High, you can compare the effects of market volatilities on Howard Hughes and Hoya Capital 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 Howard Hughes with a short position of Hoya Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howard Hughes and Hoya Capital.

Diversification Opportunities for Howard Hughes and Hoya Capital

-0.28

Correlation Coefficient

Howard Hughes  Hoya Capital

Very good diversification

The 3 months correlation between Howard and Hoya is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Howard Hughes and Hoya Capital High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoya Capital High and Howard Hughes 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 Howard Hughes are associated (or correlated) with Hoya Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoya Capital High has no effect on the direction of Howard Hughes i.e., Howard Hughes and Hoya Capital go up and down completely randomly.

Pair Corralation between Howard Hughes and Hoya Capital

Considering the 90-day investment horizon Howard Hughes is expected to generate 1.91 times more return on investment than Hoya Capital. However, Howard Hughes is 1.91 times more volatile than Hoya Capital High. It trades about 0.0 of its potential returns per unit of risk. Hoya Capital High is currently generating about -0.14 per unit of risk. If you would invest  8,355  in Howard Hughes on September 12, 2024 and sell it today you would lose (17.00) from holding Howard Hughes or give up 0.2% of portfolio value over 90 days.

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

Howard Hughes  vs.  Hoya Capital High

Howard Hughes

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Howard Hughes are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Howard Hughes may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hoya Capital High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hoya Capital High has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Hoya Capital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Howard Hughes and Hoya Capital

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

The idea behind Howard Hughes and Hoya Capital High 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.