Correlation Between HM Inwest and Beta ETF

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

By analyzing existing cross correlation between HM Inwest SA and Beta ETF Nasdaq 100, you can compare the effects of market volatilities on HM Inwest and Beta ETF 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 HM Inwest with a short position of Beta ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of HM Inwest and Beta ETF.

Diversification Opportunities for HM Inwest and Beta ETF

0.61

Correlation Coefficient

HM Inwest  Beta ETF

Poor diversification

The 3 months correlation between HMI and Beta is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding HM Inwest SA and Beta ETF Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beta ETF Nasdaq and HM Inwest 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 HM Inwest SA are associated (or correlated) with Beta ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beta ETF Nasdaq has no effect on the direction of HM Inwest i.e., HM Inwest and Beta ETF go up and down completely randomly.

Pair Corralation between HM Inwest and Beta ETF

Assuming the 90 days trading horizon HM Inwest SA is expected to generate 3.72 times more return on investment than Beta ETF. However, HM Inwest is 3.72 times more volatile than Beta ETF Nasdaq 100. It trades about 0.1 of its potential returns per unit of risk. Beta ETF Nasdaq 100 is currently generating about 0.21 per unit of risk. If you would invest  3,880  in HM Inwest SA on September 16, 2024 and sell it today you would earn a total of  730.00  from holding HM Inwest SA or generate 18.81% return on investment over 90 days.

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

HM Inwest SA  vs.  Beta ETF Nasdaq 100

HM Inwest SA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HM Inwest SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, HM Inwest reported solid returns over the last few months and may actually be approaching a breakup point.

Beta ETF Nasdaq

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Beta ETF Nasdaq 100 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Beta ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with HM Inwest and Beta ETF

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

The idea behind HM Inwest SA and Beta ETF Nasdaq 100 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.