Correlation Between Hawkins and LeddarTech Holdings

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

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

Diversification Opportunities for Hawkins and LeddarTech Holdings

0.29

Correlation Coefficient

Hawkins  LeddarTech Holdings

Modest diversification

The 3 months correlation between Hawkins and LeddarTech is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and LeddarTech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeddarTech Holdings and Hawkins 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 Hawkins are associated (or correlated) with LeddarTech Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeddarTech Holdings has no effect on the direction of Hawkins i.e., Hawkins and LeddarTech Holdings go up and down completely randomly.

Pair Corralation between Hawkins and LeddarTech Holdings

Given the investment horizon of 90 days Hawkins is expected to generate 35.58 times less return on investment than LeddarTech Holdings. But when comparing it to its historical volatility, Hawkins is 19.14 times less risky than LeddarTech Holdings. It trades about 0.07 of its potential returns per unit of risk. LeddarTech Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  31.00  in LeddarTech Holdings on September 15, 2024 and sell it today you would earn a total of  157.00  from holding LeddarTech Holdings or generate 506.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hawkins  vs.  LeddarTech Holdings

Hawkins

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in January 2025.

LeddarTech Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in LeddarTech Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, LeddarTech Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hawkins and LeddarTech Holdings

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

The idea behind Hawkins and LeddarTech Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.