Correlation Between Prosafe SE and Hill Smith
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and Hill Smith 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 Prosafe SE and Hill Smith into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and Hill Smith Holdings, you can compare the effects of market volatilities on Prosafe SE and Hill Smith 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 Prosafe SE with a short position of Hill Smith. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and Hill Smith.
Diversification Opportunities for Prosafe SE and Hill Smith
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosafe and Hill is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and Hill Smith Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hill Smith Holdings and Prosafe SE 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 Prosafe SE are associated (or correlated) with Hill Smith. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hill Smith Holdings has no effect on the direction of Prosafe SE i.e., Prosafe SE and Hill Smith go up and down completely randomly.
Pair Corralation between Prosafe SE and Hill Smith
Assuming the 90 days horizon Prosafe SE is expected to under-perform the Hill Smith. In addition to that, Prosafe SE is 2.79 times more volatile than Hill Smith Holdings. It trades about -0.59 of its total potential returns per unit of risk. Hill Smith Holdings is currently generating about 0.05 per unit of volatility. If you would invest 2,400 in Hill Smith Holdings on August 30, 2024 and sell it today you would earn a total of 60.00 from holding Hill Smith Holdings or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. Hill Smith Holdings
Performance |
| Timeline |
| Prosafe SE |
| Hill Smith Holdings |
Prosafe SE and Hill Smith Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and Hill Smith
The main advantage of trading using opposite Prosafe SE and Hill Smith positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, Hill Smith 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 Hill Smith will offset losses from the drop in Hill Smith's long position.| Prosafe SE vs. MSAD INSURANCE | Prosafe SE vs. Safety Insurance Group | Prosafe SE vs. Zurich Insurance Group | Prosafe SE vs. LIFENET INSURANCE CO |
| Hill Smith vs. Hanison Construction Holdings | Hill Smith vs. Federal Agricultural Mortgage | Hill Smith vs. TITAN MACHINERY | Hill Smith vs. SOFI TECHNOLOGIES |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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