Correlation Between H M and HM HENMAUUNSPADR

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

By analyzing existing cross correlation between H M Hennes and HM HENMAUUNSPADR 15, you can compare the effects of market volatilities on H M and HM HENMAUUNSPADR 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 H M with a short position of HM HENMAUUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of H M and HM HENMAUUNSPADR.

Diversification Opportunities for H M and HM HENMAUUNSPADR

-0.49

Correlation Coefficient

H M  HM HENMAUUNSPADR

Very good diversification

The 3 months correlation between HMSB and HMSA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding H M Hennes and HM HENMAUUNSPADR 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HM HENMAUUNSPADR and H M 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 H M Hennes are associated (or correlated) with HM HENMAUUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HM HENMAUUNSPADR has no effect on the direction of H M i.e., H M and HM HENMAUUNSPADR go up and down completely randomly.

Pair Corralation between H M and HM HENMAUUNSPADR

Assuming the 90 days trading horizon H M is expected to generate 3.89 times less return on investment than HM HENMAUUNSPADR. In addition to that, H M is 1.04 times more volatile than HM HENMAUUNSPADR 15. It trades about 0.01 of its total potential returns per unit of risk. HM HENMAUUNSPADR 15 is currently generating about 0.03 per unit of volatility. If you would invest  256.00  in HM HENMAUUNSPADR 15 on October 1, 2024 and sell it today you would earn a total of  2.00  from holding HM HENMAUUNSPADR 15 or generate 0.78% return on investment over 90 days.

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

H M Hennes  vs.  HM HENMAUUNSPADR 15

H M Hennes

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in H M Hennes are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, H M reported solid returns over the last few months and may actually be approaching a breakup point.

HM HENMAUUNSPADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HM HENMAUUNSPADR 15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with H M and HM HENMAUUNSPADR

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

The idea behind H M Hennes and HM HENMAUUNSPADR 15 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.