Correlation Between ALEFARM BREWING and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both ALEFARM BREWING 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 ALEFARM BREWING and HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALEFARM BREWING DK 05 and HYDROFARM HLD GRP, you can compare the effects of market volatilities on ALEFARM BREWING 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 ALEFARM BREWING with a short position of HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and HYDROFARM HLD.
Diversification Opportunities for ALEFARM BREWING and HYDROFARM HLD
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALEFARM and HYDROFARM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 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 ALEFARM BREWING 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 ALEFARM BREWING DK 05 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 ALEFARM BREWING i.e., ALEFARM BREWING and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between ALEFARM BREWING and HYDROFARM HLD
Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to generate 0.55 times more return on investment than HYDROFARM HLD. However, ALEFARM BREWING DK 05 is 1.8 times less risky than HYDROFARM HLD. It trades about 0.02 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about -0.1 per unit of risk. If you would invest 17.00 in ALEFARM BREWING DK 05 on October 17, 2024 and sell it today you would earn a total of 0.00 from holding ALEFARM BREWING DK 05 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALEFARM BREWING DK 05 vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| ALEFARM BREWING DK |
| HYDROFARM HLD GRP |
ALEFARM BREWING and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALEFARM BREWING and HYDROFARM HLD
The main advantage of trading using opposite ALEFARM BREWING and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING 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.| ALEFARM BREWING vs. TOMBADOR IRON LTD | ALEFARM BREWING vs. ARDAGH METAL PACDL 0001 | ALEFARM BREWING vs. United States Steel | ALEFARM BREWING vs. PT Steel Pipe |
| HYDROFARM HLD vs. EAT WELL INVESTMENT | HYDROFARM HLD vs. CDL INVESTMENT | HYDROFARM HLD vs. New Residential Investment | HYDROFARM HLD vs. CVW CLEANTECH INC |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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