Correlation Between HYDROFARM HLD and Trip Group
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and Trip 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 HYDROFARM HLD and Trip Group 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 Trip Group Limited, you can compare the effects of market volatilities on HYDROFARM HLD and Trip 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 HYDROFARM HLD with a short position of Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Trip Group.
Diversification Opportunities for HYDROFARM HLD and Trip Group
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HYDROFARM and Trip is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group Limited 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Trip Group go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Trip Group
Assuming the 90 days trading horizon HYDROFARM HLD is expected to generate 1.73 times less return on investment than Trip Group. In addition to that, HYDROFARM HLD is 2.08 times more volatile than Trip Group Limited. It trades about 0.02 of its total potential returns per unit of risk. Trip Group Limited is currently generating about 0.07 per unit of volatility. If you would invest 3,450 in Trip Group Limited on September 4, 2024 and sell it today you would earn a total of 2,770 from holding Trip Group Limited or generate 80.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Trip Group Limited
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Trip Group Limited |
HYDROFARM HLD and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Trip Group
The main advantage of trading using opposite HYDROFARM HLD and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, Trip 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 Trip Group will offset losses from the drop in Trip Group's long position.| HYDROFARM HLD vs. VOLVO B UNSPADR | HYDROFARM HLD vs. KOMATSU LTD SPONS | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. NMI Holdings |
| Trip Group vs. LIFENET INSURANCE CO | Trip Group vs. Singapore Reinsurance | Trip Group vs. Ping An Insurance | Trip Group vs. AAC TECHNOLOGHLDGADR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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