Correlation Between HP and Barclays ETN

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

By analyzing existing cross correlation between HP Inc and Barclays ETN FI, you can compare the effects of market volatilities on HP and Barclays ETN 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 Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of HP and Barclays ETN.

Diversification Opportunities for HP and Barclays ETN

-0.39

Correlation Coefficient

HP  Barclays ETN

Very good diversification

The 3 months correlation between HP and Barclays is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Barclays ETN FI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN FI 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 Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN FI has no effect on the direction of HP i.e., HP and Barclays ETN go up and down completely randomly.

Pair Corralation between HP and Barclays ETN

Considering the 90-day investment horizon HP Inc is expected to generate 2.13 times more return on investment than Barclays ETN. However, HP is 2.13 times more volatile than Barclays ETN FI. It trades about -0.02 of its potential returns per unit of risk. Barclays ETN FI is currently generating about -0.12 per unit of risk. If you would invest  3,588  in HP Inc on August 30, 2024 and sell it today you would lose (122.00) from holding HP Inc or give up 3.4% of portfolio value over 90 days.

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

HP Inc  vs.  Barclays ETN FI

HP Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Barclays ETN FI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays ETN FI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Etf's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with HP and Barclays ETN

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

The idea behind HP Inc and Barclays ETN FI 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.