Correlation Between HYDROFARM HLD and Vivendi SE
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and Vivendi SE 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 Vivendi SE 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 Vivendi SE, you can compare the effects of market volatilities on HYDROFARM HLD and Vivendi SE 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 Vivendi SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Vivendi SE.
Diversification Opportunities for HYDROFARM HLD and Vivendi SE
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HYDROFARM and Vivendi is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SE 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 Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Vivendi SE go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Vivendi SE
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 3.7 times more return on investment than Vivendi SE. However, HYDROFARM HLD is 3.7 times more volatile than Vivendi SE. It trades about 0.23 of its potential returns per unit of risk. Vivendi SE is currently generating about -0.29 per unit of risk. If you would invest 50.00 in HYDROFARM HLD GRP on September 15, 2024 and sell it today you would earn a total of 15.00 from holding HYDROFARM HLD GRP or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Vivendi SE
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Vivendi SE |
HYDROFARM HLD and Vivendi SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Vivendi SE
The main advantage of trading using opposite HYDROFARM HLD and Vivendi SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, Vivendi SE 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 Vivendi SE will offset losses from the drop in Vivendi SE'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 |
| Vivendi SE vs. News Corporation | Vivendi SE vs. Prosiebensat 1 Media | Vivendi SE vs. Superior Plus Corp | Vivendi SE vs. NMI Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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