Correlation Between Pensionbee Group and Hardide PLC

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

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

Diversification Opportunities for Pensionbee Group and Hardide PLC

0.63

Correlation Coefficient

Pensionbee Group  Hardide PLC

Poor diversification

The 3 months correlation between Pensionbee and Hardide is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pensionbee Group PLC and Hardide PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardide PLC and Pensionbee Group 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 Pensionbee Group PLC are associated (or correlated) with Hardide PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardide PLC has no effect on the direction of Pensionbee Group i.e., Pensionbee Group and Hardide PLC go up and down completely randomly.

Pair Corralation between Pensionbee Group and Hardide PLC

Assuming the 90 days trading horizon Pensionbee Group is expected to generate 10.5 times less return on investment than Hardide PLC. But when comparing it to its historical volatility, Pensionbee Group PLC is 1.55 times less risky than Hardide PLC. It trades about 0.0 of its potential returns per unit of risk. Hardide PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  625.00  in Hardide PLC on September 24, 2024 and sell it today you would lose (25.00) from holding Hardide PLC or give up 4.0% of portfolio value over 90 days.

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

Pensionbee Group PLC  vs.  Hardide PLC

Pensionbee Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pensionbee Group PLC 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hardide PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hardide PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Hardide PLC is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pensionbee Group and Hardide PLC

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

The idea behind Pensionbee Group PLC and Hardide PLC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .