Correlation Between HP and Comera Life

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

By analyzing existing cross correlation between HP Inc and Comera Life Sciences, you can compare the effects of market volatilities on HP and Comera Life 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 HP with a short position of Comera Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Comera Life.

Diversification Opportunities for HP and Comera Life

-0.61

Correlation Coefficient

HP  Comera Life

Excellent diversification

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

Pair Corralation between HP and Comera Life

Considering the 90-day investment horizon HP Inc is expected to generate 0.27 times more return on investment than Comera Life. However, HP Inc is 3.64 times less risky than Comera Life. It trades about 0.04 of its potential returns per unit of risk. Comera Life Sciences is currently generating about -0.04 per unit of risk. If you would invest  2,706  in HP Inc on September 1, 2024 and sell it today you would earn a total of  837.00  from holding HP Inc or generate 30.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	31.11%
Values	Daily Returns

HP Inc  vs.  Comera Life Sciences

HP Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, HP is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Comera Life Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comera Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comera Life is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HP and Comera Life

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

The idea behind HP Inc and Comera Life Sciences 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.