Correlation Between One 97 and Hilton Metal

Can any of the company-specific risk be diversified away by investing in both One 97 and Hilton Metal 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 One 97 and Hilton Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between One 97 Communications and Hilton Metal Forging, you can compare the effects of market volatilities on One 97 and Hilton Metal 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 One 97 with a short position of Hilton Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of One 97 and Hilton Metal.

Diversification Opportunities for One 97 and Hilton Metal

-0.39

Correlation Coefficient

One 97  Hilton Metal

Very good diversification

The 3 months correlation between One and Hilton is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding One 97 Communications and Hilton Metal Forging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Metal Forging and One 97 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 One 97 Communications are associated (or correlated) with Hilton Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Metal Forging has no effect on the direction of One 97 i.e., One 97 and Hilton Metal go up and down completely randomly.

Pair Corralation between One 97 and Hilton Metal

Assuming the 90 days trading horizon One 97 Communications is expected to generate 1.53 times more return on investment than Hilton Metal. However, One 97 is 1.53 times more volatile than Hilton Metal Forging. It trades about 0.18 of its potential returns per unit of risk. Hilton Metal Forging is currently generating about 0.02 per unit of risk. If you would invest  62,655  in One 97 Communications on September 5, 2024 and sell it today you would earn a total of  27,605  from holding One 97 Communications or generate 44.06% return on investment over 90 days.

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

One 97 Communications  vs.  Hilton Metal Forging

One 97 Communications

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in One 97 Communications are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, One 97 displayed solid returns over the last few months and may actually be approaching a breakup point.

Hilton Metal Forging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Metal Forging are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Hilton Metal is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with One 97 and Hilton Metal

The main advantage of trading using opposite One 97 and Hilton Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One 97 position performs unexpectedly, Hilton Metal 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 Hilton Metal will offset losses from the drop in Hilton Metal's long position.

The idea behind One 97 Communications and Hilton Metal Forging 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..