Correlation Between HMM and NewFlex Technology
Can any of the company-specific risk be diversified away by investing in both HMM and NewFlex Technology 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 HMM and NewFlex Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HMM Co and NewFlex Technology Co, you can compare the effects of market volatilities on HMM and NewFlex Technology 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 HMM with a short position of NewFlex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of HMM and NewFlex Technology.
Diversification Opportunities for HMM and NewFlex Technology
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between HMM and NewFlex is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding HMM Co and NewFlex Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewFlex Technology and HMM 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 HMM Co are associated (or correlated) with NewFlex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewFlex Technology has no effect on the direction of HMM i.e., HMM and NewFlex Technology go up and down completely randomly.
Pair Corralation between HMM and NewFlex Technology
Assuming the 90 days trading horizon HMM Co is expected to generate 0.9 times more return on investment than NewFlex Technology. However, HMM Co is 1.11 times less risky than NewFlex Technology. It trades about 0.11 of its potential returns per unit of risk. NewFlex Technology Co is currently generating about 0.0 per unit of risk. If you would invest 1,817,000 in HMM Co on October 25, 2024 and sell it today you would earn a total of 100,000 from holding HMM Co or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HMM Co vs. NewFlex Technology Co
Performance |
| Timeline |
| HMM Co |
| NewFlex Technology |
HMM and NewFlex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HMM and NewFlex Technology
The main advantage of trading using opposite HMM and NewFlex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HMM position performs unexpectedly, NewFlex Technology 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 NewFlex Technology will offset losses from the drop in NewFlex Technology's long position.| HMM vs. Songwon Industrial Co | HMM vs. Seah Steel Corp | HMM vs. Dong A Steel Technology | HMM vs. Lee Ku Industrial |
| NewFlex Technology vs. Samsung Electronics Co | NewFlex Technology vs. Samsung Electronics Co | NewFlex Technology vs. SK Hynix | NewFlex Technology vs. HMM Co |
Check out your portfolio center.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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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