Correlation Between HPIL Holding and Eco Depot

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

By analyzing existing cross correlation between HPIL Holding and Eco Depot, you can compare the effects of market volatilities on HPIL Holding and Eco Depot 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 HPIL Holding with a short position of Eco Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of HPIL Holding and Eco Depot.

Diversification Opportunities for HPIL Holding and Eco Depot

0.0

Correlation Coefficient

HPIL Holding  Eco Depot

Pay attention - limited upside

The 3 months correlation between HPIL and Eco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HPIL Holding and Eco Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Depot and HPIL Holding 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 HPIL Holding are associated (or correlated) with Eco Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Depot has no effect on the direction of HPIL Holding i.e., HPIL Holding and Eco Depot go up and down completely randomly.

Pair Corralation between HPIL Holding and Eco Depot

If you would invest  7.30  in Eco Depot on September 3, 2024 and sell it today you would lose (3.70) from holding Eco Depot or give up 50.68% of portfolio value over 90 days.

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

HPIL Holding  vs.  Eco Depot

HPIL Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HPIL Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, HPIL Holding is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Eco Depot

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eco Depot are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental indicators, Eco Depot reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HPIL Holding and Eco Depot

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

The idea behind HPIL Holding and Eco Depot 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.