Correlation Between Honeywell International and Inepar SA
Can any of the company-specific risk be diversified away by investing in both Honeywell International and Inepar SA 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 Honeywell International and Inepar SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and Inepar SA Indstria, you can compare the effects of market volatilities on Honeywell International and Inepar SA 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 Honeywell International with a short position of Inepar SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and Inepar SA.
Diversification Opportunities for Honeywell International and Inepar SA
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Honeywell and Inepar is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International and Inepar SA Indstria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inepar SA Indstria and Honeywell International 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 Honeywell International are associated (or correlated) with Inepar SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inepar SA Indstria has no effect on the direction of Honeywell International i.e., Honeywell International and Inepar SA go up and down completely randomly.
Pair Corralation between Honeywell International and Inepar SA
Assuming the 90 days trading horizon Honeywell International is expected to generate 0.52 times more return on investment than Inepar SA. However, Honeywell International is 1.94 times less risky than Inepar SA. It trades about 0.19 of its potential returns per unit of risk. Inepar SA Indstria is currently generating about -0.08 per unit of risk. If you would invest 110,908 in Honeywell International on September 23, 2024 and sell it today you would earn a total of 28,638 from holding Honeywell International or generate 25.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Honeywell International vs. Inepar SA Indstria
Performance |
Timeline |
Honeywell International |
Inepar SA Indstria |
Honeywell International and Inepar SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Honeywell International and Inepar SA
The main advantage of trading using opposite Honeywell International and Inepar SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International position performs unexpectedly, Inepar SA 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 Inepar SA will offset losses from the drop in Inepar SA's long position.Honeywell International vs. General Electric | Honeywell International vs. Eaton plc | Honeywell International vs. C1MI34 | Honeywell International vs. Otis Worldwide |
Inepar SA vs. METISA Metalrgica Timboense | Inepar SA vs. Wetzel SA | Inepar SA vs. Recrusul SA | Inepar SA vs. Randon SA Implementos |
Check out your portfolio center.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |