Correlation Between Welsbach Technology and HHG Capital

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

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

Diversification Opportunities for Welsbach Technology and HHG Capital

-0.5

Correlation Coefficient

Welsbach Technology  HHG Capital

Very good diversification

The 3 months correlation between Welsbach and HHG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Welsbach Technology Metals and HHG Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HHG Capital Corp and Welsbach Technology 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 Welsbach Technology Metals are associated (or correlated) with HHG Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HHG Capital Corp has no effect on the direction of Welsbach Technology i.e., Welsbach Technology and HHG Capital go up and down completely randomly.

Pair Corralation between Welsbach Technology and HHG Capital

Given the investment horizon of 90 days Welsbach Technology Metals is expected to generate 0.76 times more return on investment than HHG Capital. However, Welsbach Technology Metals is 1.31 times less risky than HHG Capital. It trades about 0.16 of its potential returns per unit of risk. HHG Capital Corp is currently generating about -0.23 per unit of risk. If you would invest  1,101  in Welsbach Technology Metals on September 15, 2024 and sell it today you would earn a total of  99.00  from holding Welsbach Technology Metals or generate 8.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	26.56%
Values	Daily Returns

Welsbach Technology Metals  vs.  HHG Capital Corp

Welsbach Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Welsbach Technology Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal primary indicators, Welsbach Technology may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HHG Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HHG Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Welsbach Technology and HHG Capital

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

The idea behind Welsbach Technology Metals and HHG Capital Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.