Correlation Between Hoist Finance and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Hoist Finance and Spirent Communications 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 Hoist Finance and Spirent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoist Finance AB and Spirent Communications plc, you can compare the effects of market volatilities on Hoist Finance and Spirent Communications 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 Hoist Finance with a short position of Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoist Finance and Spirent Communications.
Diversification Opportunities for Hoist Finance and Spirent Communications
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hoist and Spirent is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hoist Finance AB and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications and Hoist Finance 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 Hoist Finance AB are associated (or correlated) with Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Hoist Finance i.e., Hoist Finance and Spirent Communications go up and down completely randomly.
Pair Corralation between Hoist Finance and Spirent Communications
Assuming the 90 days horizon Hoist Finance AB is expected to generate 0.69 times more return on investment than Spirent Communications. However, Hoist Finance AB is 1.45 times less risky than Spirent Communications. It trades about 0.14 of its potential returns per unit of risk. Spirent Communications plc is currently generating about 0.05 per unit of risk. If you would invest 293.00 in Hoist Finance AB on October 18, 2024 and sell it today you would earn a total of 499.00 from holding Hoist Finance AB or generate 170.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hoist Finance AB vs. Spirent Communications plc
Performance |
| Timeline |
| Hoist Finance AB |
| Spirent Communications |
Hoist Finance and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoist Finance and Spirent Communications
The main advantage of trading using opposite Hoist Finance and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoist Finance position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| Hoist Finance vs. Spirent Communications plc | Hoist Finance vs. Entravision Communications | Hoist Finance vs. Khiron Life Sciences | Hoist Finance vs. TOMBADOR IRON LTD |
| Spirent Communications vs. AGRICULTBK HADR25 YC | Spirent Communications vs. Penta Ocean Construction Co | Spirent Communications vs. Hanison Construction Holdings | Spirent Communications vs. CEOTRONICS |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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