Correlation Between HYDROFARM HLD and WUXI BIOLOGICS
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and WUXI BIOLOGICS 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 HYDROFARM HLD and WUXI BIOLOGICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and WUXI BIOLOGICS 00000083, you can compare the effects of market volatilities on HYDROFARM HLD and WUXI BIOLOGICS 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 HYDROFARM HLD with a short position of WUXI BIOLOGICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and WUXI BIOLOGICS.
Diversification Opportunities for HYDROFARM HLD and WUXI BIOLOGICS
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HYDROFARM and WUXI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and WUXI BIOLOGICS 00000083 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WUXI BIOLOGICS 00000083 and HYDROFARM HLD 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 HYDROFARM HLD GRP are associated (or correlated) with WUXI BIOLOGICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WUXI BIOLOGICS 00000083 has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and WUXI BIOLOGICS go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and WUXI BIOLOGICS
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 1.11 times more return on investment than WUXI BIOLOGICS. However, HYDROFARM HLD is 1.11 times more volatile than WUXI BIOLOGICS 00000083. It trades about 0.0 of its potential returns per unit of risk. WUXI BIOLOGICS 00000083 is currently generating about -0.02 per unit of risk. If you would invest 104.00 in HYDROFARM HLD GRP on September 12, 2024 and sell it today you would lose (39.00) from holding HYDROFARM HLD GRP or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. WUXI BIOLOGICS 00000083
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| WUXI BIOLOGICS 00000083 |
HYDROFARM HLD and WUXI BIOLOGICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and WUXI BIOLOGICS
The main advantage of trading using opposite HYDROFARM HLD and WUXI BIOLOGICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, WUXI BIOLOGICS 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 WUXI BIOLOGICS will offset losses from the drop in WUXI BIOLOGICS's long position.| HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Daimler Truck Holding | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
| WUXI BIOLOGICS vs. HYDROFARM HLD GRP | WUXI BIOLOGICS vs. Citic Telecom International | WUXI BIOLOGICS vs. Consolidated Communications Holdings | WUXI BIOLOGICS vs. Comba Telecom Systems |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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