Correlation Between Home Center and Intellian Technologies
Can any of the company-specific risk be diversified away by investing in both Home Center and Intellian Technologies 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 Home Center and Intellian Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Center Holdings and Intellian Technologies, you can compare the effects of market volatilities on Home Center and Intellian Technologies 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 Home Center with a short position of Intellian Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Center and Intellian Technologies.
Diversification Opportunities for Home Center and Intellian Technologies
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Intellian is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Home Center Holdings and Intellian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellian Technologies and Home Center 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 Home Center Holdings are associated (or correlated) with Intellian Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellian Technologies has no effect on the direction of Home Center i.e., Home Center and Intellian Technologies go up and down completely randomly.
Pair Corralation between Home Center and Intellian Technologies
Assuming the 90 days trading horizon Home Center Holdings is expected to generate 0.61 times more return on investment than Intellian Technologies. However, Home Center Holdings is 1.63 times less risky than Intellian Technologies. It trades about -0.08 of its potential returns per unit of risk. Intellian Technologies is currently generating about -0.07 per unit of risk. If you would invest 117,838 in Home Center Holdings on September 1, 2024 and sell it today you would lose (41,138) from holding Home Center Holdings or give up 34.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Center Holdings vs. Intellian Technologies
Performance |
| Timeline |
| Home Center Holdings |
| Intellian Technologies |
Home Center and Intellian Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Center and Intellian Technologies
The main advantage of trading using opposite Home Center and Intellian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Center position performs unexpectedly, Intellian Technologies 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 Intellian Technologies will offset losses from the drop in Intellian Technologies' long position.| Home Center vs. LG Chemicals | Home Center vs. POSCO Holdings | Home Center vs. Hanwha Solutions | Home Center vs. Hyundai Steel |
| Intellian Technologies vs. Digital Power Communications | Intellian Technologies vs. Daelim Trading Co | Intellian Technologies vs. DSC Investment | Intellian Technologies vs. Coloray International Investment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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