Correlation Between H-FARM SPA and TREE
Can any of the company-specific risk be diversified away by investing in both H-FARM SPA and TREE 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 H-FARM SPA and TREE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and TREECOM, you can compare the effects of market volatilities on H-FARM SPA and TREE 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 H-FARM SPA with a short position of TREE. Check out your portfolio center. Please also check ongoing floating volatility patterns of H-FARM SPA and TREE.
Diversification Opportunities for H-FARM SPA and TREE
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between H-FARM and TREE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and TREECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TREECOM and H-FARM SPA 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 H FARM SPA are associated (or correlated) with TREE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TREECOM has no effect on the direction of H-FARM SPA i.e., H-FARM SPA and TREE go up and down completely randomly.
Pair Corralation between H-FARM SPA and TREE
Assuming the 90 days horizon H FARM SPA is expected to generate 3.82 times more return on investment than TREE. However, H-FARM SPA is 3.82 times more volatile than TREECOM. It trades about 0.09 of its potential returns per unit of risk. TREECOM is currently generating about 0.28 per unit of risk. If you would invest 12.00 in H FARM SPA on October 24, 2024 and sell it today you would earn a total of 1.00 from holding H FARM SPA or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. TREECOM
Performance |
| Timeline |
| H FARM SPA |
| TREECOM |
H-FARM SPA and TREE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H-FARM SPA and TREE
The main advantage of trading using opposite H-FARM SPA and TREE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H-FARM SPA position performs unexpectedly, TREE 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 TREE will offset losses from the drop in TREE's long position.| H-FARM SPA vs. SINGAPORE AIRLINES | H-FARM SPA vs. MHP Hotel AG | H-FARM SPA vs. Gol Intelligent Airlines | H-FARM SPA vs. Choice Hotels International |
| TREE vs. TAL Education Group | TREE vs. SENECA FOODS A | TREE vs. STRAYER EDUCATION | TREE vs. Cal Maine Foods |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |