Correlation Between HLB Power and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both HLB Power and Adaptive Plasma 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 HLB Power and Adaptive Plasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HLB Power Co and Adaptive Plasma Technology, you can compare the effects of market volatilities on HLB Power and Adaptive Plasma 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 HLB Power with a short position of Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of HLB Power and Adaptive Plasma.
Diversification Opportunities for HLB Power and Adaptive Plasma
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HLB and Adaptive is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding HLB Power Co and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech and HLB Power 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 HLB Power Co are associated (or correlated) with Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of HLB Power i.e., HLB Power and Adaptive Plasma go up and down completely randomly.
Pair Corralation between HLB Power and Adaptive Plasma
Assuming the 90 days trading horizon HLB Power Co is expected to under-perform the Adaptive Plasma. In addition to that, HLB Power is 1.14 times more volatile than Adaptive Plasma Technology. It trades about -0.03 of its total potential returns per unit of risk. Adaptive Plasma Technology is currently generating about -0.02 per unit of volatility. If you would invest 1,026,316 in Adaptive Plasma Technology on September 12, 2024 and sell it today you would lose (404,316) from holding Adaptive Plasma Technology or give up 39.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HLB Power Co vs. Adaptive Plasma Technology
Performance |
| Timeline |
| HLB Power |
| Adaptive Plasma Tech |
HLB Power and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HLB Power and Adaptive Plasma
The main advantage of trading using opposite HLB Power and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HLB Power position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma's long position.| HLB Power vs. Cloud Air CoLtd | HLB Power vs. Jin Air Co | HLB Power vs. Daejung Chemicals Metals | HLB Power vs. iNtRON Biotechnology |
| Adaptive Plasma vs. Hankook Steel Co | Adaptive Plasma vs. J Steel Co | Adaptive Plasma vs. Moonbae Steel | Adaptive Plasma vs. LG Display 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 Stocks Directory module to find actively traded stocks across global markets.
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