Correlation Between HXRO and SNC

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

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

Diversification Opportunities for HXRO and SNC

-0.22

Correlation Coefficient

HXRO  SNC

Very good diversification

The 3 months correlation between HXRO and SNC is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HXRO and SNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC and HXRO 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 HXRO are associated (or correlated) with SNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC has no effect on the direction of HXRO i.e., HXRO and SNC go up and down completely randomly.

Pair Corralation between HXRO and SNC

Assuming the 90 days trading horizon HXRO is expected to generate 0.72 times more return on investment than SNC. However, HXRO is 1.39 times less risky than SNC. It trades about 0.26 of its potential returns per unit of risk. SNC is currently generating about -0.03 per unit of risk. If you would invest  23.00  in HXRO on September 2, 2024 and sell it today you would earn a total of  16.00  from holding HXRO or generate 69.57% return on investment over 90 days.

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

HXRO  vs.  SNC

HXRO

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HXRO are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, HXRO exhibited solid returns over the last few months and may actually be approaching a breakup point.

SNC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with HXRO and SNC

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

The idea behind HXRO and SNC 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.