Correlation Between PLAY2CHILL and Hexcel
Can any of the company-specific risk be diversified away by investing in both PLAY2CHILL and Hexcel 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 PLAY2CHILL and Hexcel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAY2CHILL SA ZY and Hexcel, you can compare the effects of market volatilities on PLAY2CHILL and Hexcel 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 PLAY2CHILL with a short position of Hexcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAY2CHILL and Hexcel.
Diversification Opportunities for PLAY2CHILL and Hexcel
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PLAY2CHILL and Hexcel is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PLAY2CHILL SA ZY and Hexcel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexcel and PLAY2CHILL 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 PLAY2CHILL SA ZY are associated (or correlated) with Hexcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexcel has no effect on the direction of PLAY2CHILL i.e., PLAY2CHILL and Hexcel go up and down completely randomly.
Pair Corralation between PLAY2CHILL and Hexcel
Assuming the 90 days horizon PLAY2CHILL SA ZY is expected to under-perform the Hexcel. In addition to that, PLAY2CHILL is 1.35 times more volatile than Hexcel. It trades about -0.01 of its total potential returns per unit of risk. Hexcel is currently generating about -0.01 per unit of volatility. If you would invest 6,655 in Hexcel on September 12, 2024 and sell it today you would lose (605.00) from holding Hexcel or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAY2CHILL SA ZY vs. Hexcel
Performance |
| Timeline |
| PLAY2CHILL SA ZY |
| Hexcel |
PLAY2CHILL and Hexcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAY2CHILL and Hexcel
The main advantage of trading using opposite PLAY2CHILL and Hexcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAY2CHILL position performs unexpectedly, Hexcel 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 Hexcel will offset losses from the drop in Hexcel's long position.| PLAY2CHILL vs. NEXON Co | PLAY2CHILL vs. Take Two Interactive Software | PLAY2CHILL vs. Superior Plus Corp | PLAY2CHILL vs. SIVERS SEMICONDUCTORS AB |
| Hexcel vs. Postal Savings Bank | Hexcel vs. Japan Asia Investment | Hexcel vs. AGF Management Limited | Hexcel vs. Q2M Managementberatung AG |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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