Correlation Between Mauna Kea and Hitechpros
Can any of the company-specific risk be diversified away by investing in both Mauna Kea and Hitechpros 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 Mauna Kea and Hitechpros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauna Kea Technologies and Hitechpros, you can compare the effects of market volatilities on Mauna Kea and Hitechpros 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 Mauna Kea with a short position of Hitechpros. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauna Kea and Hitechpros.
Diversification Opportunities for Mauna Kea and Hitechpros
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mauna and Hitechpros is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and Hitechpros in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitechpros and Mauna Kea 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 Mauna Kea Technologies are associated (or correlated) with Hitechpros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitechpros has no effect on the direction of Mauna Kea i.e., Mauna Kea and Hitechpros go up and down completely randomly.
Pair Corralation between Mauna Kea and Hitechpros
Assuming the 90 days trading horizon Mauna Kea Technologies is expected to under-perform the Hitechpros. But the stock apears to be less risky and, when comparing its historical volatility, Mauna Kea Technologies is 1.51 times less risky than Hitechpros. The stock trades about -0.03 of its potential returns per unit of risk. The Hitechpros is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Hitechpros on September 3, 2024 and sell it today you would earn a total of 60.00 from holding Hitechpros or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.44% |
| Values | Daily Returns |
Mauna Kea Technologies vs. Hitechpros
Performance |
| Timeline |
| Mauna Kea Technologies |
| Hitechpros |
Mauna Kea and Hitechpros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauna Kea and Hitechpros
The main advantage of trading using opposite Mauna Kea and Hitechpros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea position performs unexpectedly, Hitechpros 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 Hitechpros will offset losses from the drop in Hitechpros' long position.| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF SA |
| Hitechpros vs. Groupe Guillin SA | Hitechpros vs. Infotel SA | Hitechpros vs. Linedata Services SA | Hitechpros vs. Aubay Socit Anonyme |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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