Correlation Between Concraft Holding and Halfords Group
Can any of the company-specific risk be diversified away by investing in both Concraft Holding and Halfords Group 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 Concraft Holding and Halfords Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concraft Holding Co and Halfords Group PLC, you can compare the effects of market volatilities on Concraft Holding and Halfords Group 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 Concraft Holding with a short position of Halfords Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concraft Holding and Halfords Group.
Diversification Opportunities for Concraft Holding and Halfords Group
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Concraft and Halfords is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Concraft Holding Co and Halfords Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halfords Group PLC and Concraft Holding 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 Concraft Holding Co are associated (or correlated) with Halfords Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halfords Group PLC has no effect on the direction of Concraft Holding i.e., Concraft Holding and Halfords Group go up and down completely randomly.
Pair Corralation between Concraft Holding and Halfords Group
Assuming the 90 days trading horizon Concraft Holding Co is expected to under-perform the Halfords Group. But the stock apears to be less risky and, when comparing its historical volatility, Concraft Holding Co is 2.88 times less risky than Halfords Group. The stock trades about -0.23 of its potential returns per unit of risk. The Halfords Group PLC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 371.00 in Halfords Group PLC on August 30, 2024 and sell it today you would lose (9.00) from holding Halfords Group PLC or give up 2.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concraft Holding Co vs. Halfords Group PLC
Performance |
| Timeline |
| Concraft Holding |
| Halfords Group PLC |
Concraft Holding and Halfords Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concraft Holding and Halfords Group
The main advantage of trading using opposite Concraft Holding and Halfords Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concraft Holding position performs unexpectedly, Halfords Group 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 Halfords Group will offset losses from the drop in Halfords Group's long position.| Concraft Holding vs. Merry Electronics Co | Concraft Holding vs. Flexium Interconnect | Concraft Holding vs. General Interface Solution | Concraft Holding vs. Genius Electronic Optical |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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