Correlation Between Howard Hughes and Safe

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

By analyzing existing cross correlation between Howard Hughes and Safe and Green, you can compare the effects of market volatilities on Howard Hughes and Safe 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 Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Howard Hughes and Safe.

Diversification Opportunities for Howard Hughes and Safe

-0.61

Correlation Coefficient

Howard Hughes  Safe

Excellent diversification

The 3 months correlation between Howard and Safe is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Howard Hughes and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green 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 Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of Howard Hughes i.e., Howard Hughes and Safe go up and down completely randomly.

Pair Corralation between Howard Hughes and Safe

Considering the 90-day investment horizon Howard Hughes is expected to generate 0.15 times more return on investment than Safe. However, Howard Hughes is 6.48 times less risky than Safe. It trades about 0.19 of its potential returns per unit of risk. Safe and Green is currently generating about -0.1 per unit of risk. If you would invest  7,316  in Howard Hughes on September 5, 2024 and sell it today you would earn a total of  1,260  from holding Howard Hughes or generate 17.22% return on investment over 90 days.

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

Howard Hughes  vs.  Safe and Green

Howard Hughes

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Howard Hughes are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent technical indicators, Howard Hughes demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Safe and Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safe and Green has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Howard Hughes and Safe

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

The idea behind Howard Hughes and Safe and Green 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.