Correlation Between Hurco Companies and Carters

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

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

Diversification Opportunities for Hurco Companies and Carters

-0.38

Correlation Coefficient

Hurco Companies  Carters

Very good diversification

The 3 months correlation between Hurco and Carters is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Hurco Companies i.e., Hurco Companies and Carters go up and down completely randomly.

Pair Corralation between Hurco Companies and Carters

Given the investment horizon of 90 days Hurco Companies is expected to under-perform the Carters. In addition to that, Hurco Companies is 1.26 times more volatile than Carters. It trades about -0.41 of its total potential returns per unit of risk. Carters is currently generating about -0.01 per unit of volatility. If you would invest  5,501  in Carters on September 28, 2024 and sell it today you would lose (31.00) from holding Carters or give up 0.56% of portfolio value over 90 days.

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

Hurco Companies  vs.  Carters

Hurco Companies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurco Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Carters

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carters has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Hurco Companies and Carters

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

The idea behind Hurco Companies and Carters 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.