Correlation Between Hawkins and Lotus Technology

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

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

Diversification Opportunities for Hawkins and Lotus Technology

-0.12

Correlation Coefficient

Hawkins  Lotus Technology

Good diversification

The 3 months correlation between Hawkins and Lotus is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins and Lotus Technology American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology American 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology American has no effect on the direction of Hawkins i.e., Hawkins and Lotus Technology go up and down completely randomly.

Pair Corralation between Hawkins and Lotus Technology

Given the investment horizon of 90 days Hawkins is expected to generate 0.57 times more return on investment than Lotus Technology. However, Hawkins is 1.76 times less risky than Lotus Technology. It trades about 0.12 of its potential returns per unit of risk. Lotus Technology American is currently generating about -0.02 per unit of risk. If you would invest  3,607  in Hawkins on September 26, 2024 and sell it today you would earn a total of  8,960  from holding Hawkins or generate 248.41% return on investment over 90 days.

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

Hawkins  vs.  Lotus Technology American

Hawkins

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking signals, Hawkins is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Lotus Technology American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotus Technology American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Hawkins and Lotus Technology

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

The idea behind Hawkins and Lotus Technology American 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.