Correlation Between WIMFARM SA and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and HYDROFARM HLD 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 WIMFARM SA and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and HYDROFARM HLD GRP, you can compare the effects of market volatilities on WIMFARM SA and HYDROFARM HLD 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 WIMFARM SA with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and HYDROFARM HLD.
Diversification Opportunities for WIMFARM SA and HYDROFARM HLD
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between WIMFARM and HYDROFARM is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between WIMFARM SA and HYDROFARM HLD
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the HYDROFARM HLD. But the stock apears to be less risky and, when comparing its historical volatility, WIMFARM SA EO is 1.51 times less risky than HYDROFARM HLD. The stock trades about -0.08 of its potential returns per unit of risk. The HYDROFARM HLD GRP is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 186.00 in HYDROFARM HLD GRP on November 10, 2024 and sell it today you would lose (124.00) from holding HYDROFARM HLD GRP or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| WIMFARM SA EO |
| HYDROFARM HLD GRP |
WIMFARM SA and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and HYDROFARM HLD
The main advantage of trading using opposite WIMFARM SA and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| WIMFARM SA vs. Sch Environnement SA | WIMFARM SA vs. United States Steel | WIMFARM SA vs. Aluminum of | WIMFARM SA vs. MAANSHAN IRON H |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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