Correlation Between HYDROFARM HLD and Mastercard
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and Mastercard 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 Mastercard 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 Mastercard, you can compare the effects of market volatilities on HYDROFARM HLD and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Mastercard.
Diversification Opportunities for HYDROFARM HLD and Mastercard
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HYDROFARM and Mastercard is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Mastercard go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Mastercard
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to under-perform the Mastercard. In addition to that, HYDROFARM HLD is 5.09 times more volatile than Mastercard. It trades about 0.0 of its total potential returns per unit of risk. Mastercard is currently generating about 0.07 per unit of volatility. If you would invest 34,160 in Mastercard on September 3, 2024 and sell it today you would earn a total of 16,520 from holding Mastercard or generate 48.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Mastercard
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Mastercard |
HYDROFARM HLD and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Mastercard
The main advantage of trading using opposite HYDROFARM HLD and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard'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 |
| Mastercard vs. Amkor Technology | Mastercard vs. LION ONE METALS | Mastercard vs. Vishay Intertechnology | Mastercard vs. ADRIATIC METALS LS 013355 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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