Correlation Between VETIVA INDUSTRIAL and CONSOLIDATED HALLMARK

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

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

Diversification Opportunities for VETIVA INDUSTRIAL and CONSOLIDATED HALLMARK

-0.49

Correlation Coefficient

VETIVA INDUSTRIAL  CONSOLIDATED HALLMARK

Very good diversification

The 3 months correlation between VETIVA and CONSOLIDATED is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding VETIVA INDUSTRIAL ETF and CONSOLIDATED HALLMARK INSURANC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED HALLMARK and VETIVA INDUSTRIAL 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 VETIVA INDUSTRIAL ETF are associated (or correlated) with CONSOLIDATED HALLMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED HALLMARK has no effect on the direction of VETIVA INDUSTRIAL i.e., VETIVA INDUSTRIAL and CONSOLIDATED HALLMARK go up and down completely randomly.

Pair Corralation between VETIVA INDUSTRIAL and CONSOLIDATED HALLMARK

Assuming the 90 days trading horizon VETIVA INDUSTRIAL ETF is expected to under-perform the CONSOLIDATED HALLMARK. But the stock apears to be less risky and, when comparing its historical volatility, VETIVA INDUSTRIAL ETF is 7.4 times less risky than CONSOLIDATED HALLMARK. The stock trades about -0.16 of its potential returns per unit of risk. The CONSOLIDATED HALLMARK INSURANCE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  152.00  in CONSOLIDATED HALLMARK INSURANCE on September 14, 2024 and sell it today you would earn a total of  70.00  from holding CONSOLIDATED HALLMARK INSURANCE or generate 46.05% return on investment over 90 days.

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

VETIVA INDUSTRIAL ETF  vs.  CONSOLIDATED HALLMARK INSURANC

VETIVA INDUSTRIAL ETF

Risk-Adjusted Performance

0 of 100

Very Weak

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

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK INSURANCE are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, CONSOLIDATED HALLMARK disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VETIVA INDUSTRIAL and CONSOLIDATED HALLMARK

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

The idea behind VETIVA INDUSTRIAL ETF and CONSOLIDATED HALLMARK INSURANCE 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.