Correlation Between Hurco Companies and Arrow Electronics

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

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

Diversification Opportunities for Hurco Companies and Arrow Electronics

-0.17

Correlation Coefficient

Hurco Companies  Arrow Electronics

Good diversification

The 3 months correlation between Hurco and Arrow is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Arrow Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Electronics and Hurco Companies 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 Hurco Companies are associated (or correlated) with Arrow Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Electronics has no effect on the direction of Hurco Companies i.e., Hurco Companies and Arrow Electronics go up and down completely randomly.

Pair Corralation between Hurco Companies and Arrow Electronics

Given the investment horizon of 90 days Hurco Companies is expected to generate 1.46 times more return on investment than Arrow Electronics. However, Hurco Companies is 1.46 times more volatile than Arrow Electronics. It trades about 0.03 of its potential returns per unit of risk. Arrow Electronics is currently generating about -0.1 per unit of risk. If you would invest  1,819  in Hurco Companies on September 27, 2024 and sell it today you would earn a total of  54.00  from holding Hurco Companies or generate 2.97% return on investment over 90 days.

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

Hurco Companies  vs.  Arrow Electronics

Hurco Companies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Hurco Companies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Arrow Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arrow Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Hurco Companies and Arrow Electronics

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

The idea behind Hurco Companies and Arrow Electronics 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.