Correlation Between Powerstorm Holdings and Hayward Holdings

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

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

Diversification Opportunities for Powerstorm Holdings and Hayward Holdings

-0.42

Correlation Coefficient

Powerstorm Holdings  Hayward Holdings

Very good diversification

The 3 months correlation between Powerstorm and Hayward is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Powerstorm Holdings and Hayward Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hayward Holdings and Powerstorm Holdings 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 Powerstorm Holdings are associated (or correlated) with Hayward Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hayward Holdings has no effect on the direction of Powerstorm Holdings i.e., Powerstorm Holdings and Hayward Holdings go up and down completely randomly.

Pair Corralation between Powerstorm Holdings and Hayward Holdings

Given the investment horizon of 90 days Powerstorm Holdings is expected to under-perform the Hayward Holdings. In addition to that, Powerstorm Holdings is 4.87 times more volatile than Hayward Holdings. It trades about -0.03 of its total potential returns per unit of risk. Hayward Holdings is currently generating about 0.05 per unit of volatility. If you would invest  1,474  in Hayward Holdings on September 22, 2024 and sell it today you would earn a total of  70.00  from holding Hayward Holdings or generate 4.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Powerstorm Holdings  vs.  Hayward Holdings

Powerstorm Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powerstorm Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hayward Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hayward Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hayward Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Powerstorm Holdings and Hayward Holdings

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

The idea behind Powerstorm Holdings and Hayward 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.