Correlation Between Advanced Container and Hillcrest Energy
Can any of the company-specific risk be diversified away by investing in both Advanced Container and Hillcrest Energy 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 Advanced Container and Hillcrest Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Container Technologies and Hillcrest Energy Technologies, you can compare the effects of market volatilities on Advanced Container and Hillcrest Energy 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 Advanced Container with a short position of Hillcrest Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Container and Hillcrest Energy.
Diversification Opportunities for Advanced Container and Hillcrest Energy
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advanced and Hillcrest is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Container Technologie and Hillcrest Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillcrest Energy Tec and Advanced Container 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 Advanced Container Technologies are associated (or correlated) with Hillcrest Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillcrest Energy Tec has no effect on the direction of Advanced Container i.e., Advanced Container and Hillcrest Energy go up and down completely randomly.
Pair Corralation between Advanced Container and Hillcrest Energy
Given the investment horizon of 90 days Advanced Container Technologies is expected to under-perform the Hillcrest Energy. In addition to that, Advanced Container is 1.55 times more volatile than Hillcrest Energy Technologies. It trades about -0.04 of its total potential returns per unit of risk. Hillcrest Energy Technologies is currently generating about -0.03 per unit of volatility. If you would invest 38.00 in Hillcrest Energy Technologies on September 12, 2024 and sell it today you would lose (26.00) from holding Hillcrest Energy Technologies or give up 68.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Container Technologie vs. Hillcrest Energy Technologies
Performance |
| Timeline |
| Advanced Container |
| Hillcrest Energy Tec |
Advanced Container and Hillcrest Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Container and Hillcrest Energy
The main advantage of trading using opposite Advanced Container and Hillcrest Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Container position performs unexpectedly, Hillcrest Energy 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 Hillcrest Energy will offset losses from the drop in Hillcrest Energy's long position.| Advanced Container vs. Vanguard SP 500 | Advanced Container vs. Vanguard Real Estate | Advanced Container vs. Vanguard Total Bond | Advanced Container vs. Vanguard High Dividend |
| Hillcrest Energy vs. Permian Resources | Hillcrest Energy vs. Devon Energy | Hillcrest Energy vs. EOG Resources | Hillcrest Energy vs. Coterra Energy |
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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